On the positive side - savings rate are on all time high

Just read an article recently about the savings rate shot up during the lockdown months. I even mentioned it earlier that the lockdown at least for me made it easier to save, but seems like it wasn’t just for me, it was for most of us.

In the past 3 months when the shops, restaurants, pubs and basically everything shut down one thing became apparent, we have to hold back on our consumer mindset because back in mid March we didn’t know how long this situation will last. Now we have a rough idea that from July the travel restriciton will be lifted and also the pubs will open, from Monday 15th June most shops will be able to open with safety measures in place and slowly slowly everything will be back to normal.

According to the Bank of England figures, households saved more than £30bn from March to April which is a record, the households savings are mainly driven by fear for the future.

Substantial increase in household savings

The main problem with this is that a major crises was needed for most of us to realize the importance of savings. Truth to be told, most of the time it’s not the system, it’s not the banks nor the dodgy car leasing companies are robbing us, instead our very own consumer mindset and wrong set of priorities.

I realized on my own case that due to the lockdown I also increased my savings with 30% at least obviously not just because of the lack of shopping options (I’m not a big fan of online shopping and tend to make just few purchases online) but also the free travel and no need of travel was a big bump and things like eating out, drinks outside (even tough I’m not a big drinker), holidays, the unnecessary clothes and miscellaneous items time to time added up and yeah of course the expensive gym membership wasn’t deducted from my account.

The BoE’s statistics proves also that in crises we realize the importance of savings, a good rainy day funds’ importance and also that we don’t know what the tomorrow brings for us so we need to be prepared as much as we can.

I encourage everyone to save, but it’s not enough, we all have to make those savings work for us, at least a part of it. We can already see the rebouncing of the stock market and if you watched carefully and made those scary steps to invest when everyone else were selling their stocks than you most probably made quiet a bit of money, so keep on going.

If you haven’t invested back that time, I would like to tell you, it’s never too late and start it as soon as you can, you didn’t miss out on nothing, never forget it’s not timing the market instead time in the market.

The less crap you buy the more of freedom you will have.

Your sincerely

To/Minimal