The year 2020 changed a lot of things for everyone. But it wasn’t all bad. For some of us, working from home (and a lack of social engagements) was an unexpected opportunity to save some cash. Others, of course, were not so lucky, with many people being furloughed or taking pay cuts, too.

“Working from home, changing jobs or not working at all will have made many people question what they want out of life,” Iona Bain, author of Own It, tells British Vogue. “Prior to Covid-19, most of us were buying stuff that rarely brought lasting fulfilment, and that we were too stressed and time-poor to appreciate. We were paying a huge convenience premium and relying on expensive crutches (like takeaways) to make our workings lives easier. And we all too easily succumbed to lifestyle creep, becoming more high-maintenance when our income went up, and viewing luxuries more and more as essentials.” Plenty of us also realised “how much we overspend on commuting,” continues Bain, as well as “busy working lifestyles, frantic socialising, and saying ‘yes’ to everything and everyone”.

Now that 2021 is underway, it’s the ideal time – as the pandemic continues – to get your finances in order. “There is certainly going to be a rush to overcompensate for the time we’ve lost once the world is able to reopen,” says Erin Lowry, author of the three-part Broke Millennial series. “It’s critical to not overspend in that time period. One option is to start setting aside money right now that’s earmarked to spend on travel, concerts, dinners, plays, family events, and more. You may have noticed that some of your priorities naturally shifted in the pandemic in a way that feels permanent, which is okay. You just may need to have tough, boundary-setting conversations with loved ones as the world re-opens, if you’ve realised activities you once participated in no longer bring you pleasure.”

From budgeting to planning for unforeseen circumstances to accessing financial aid, Vogue spoke to three female financial experts – Bain, Lowry and Bola Sokunbi, author and founder and CEO of Clever Girl Finance – about how to tackle the year ahead, while seizing the moment to adopt a new monetary mindset.

Take the lessons from the past year on board

If we learned one lesson in 2020, it’s to be prepared for the unexpected. “For many years, I’ve talked about the importance of having a rainy day fund,” says Bain. “You need to have at least a few months’ worth of income in an easy access savings account. That money could be exactly what you need to tide you over, give you breathing space and help you figure out what to do next in a crisis.” Even though the UK government has extended its furlough scheme until April, it doesn’t mean everyone will be protected by it. “Unfortunately, during 2020, we also learned that the government may not step in and protect absolutely everyone, with about 3 million self-employed people and thousands of businesses falling through the cracks of support packages,” points out Bain. Another reason why increasing your savings right now is a good idea for the year ahead.

But it certainly wasn’t all bad. “Covid-19 broke that relentless work-spend treadmill,” says Bain. “We had time out from the huge coffee ‘n’ commute expenses associated with office-based working. That’s why credit card debts were paid off and savings increased in record amounts during 2020. Many people realised they could live a simpler, low-maintenance lifestyle, and easily survive (and even thrive).”

And we learned the importance of financial protection, too. “You need to know your legal, regulatory rights and have proper insurance just in case,” she says. “Millions of people saw holidays, weddings and other occasions cancelled – those who didn’t understand how to claim refunds or failed to protect themselves in advance lost out. You can get refunds on your credit card for big ticket items (over £100) through something called Section 75, or you can claim ‘chargeback’ on your debit card. You should always have comprehensive holiday and wedding insurance in place: don’t scrimp on this as it’s a false economy.”

Draw up a budget to get ahead

First thing’s first: look at your incomings, outgoings and draw up a budget plan for yourself. “The foundation of creating a financial budget is understanding how much you earn and what your expenses are on a monthly basis,” explains Sokunbi. “You’ll need to look at your income on your pay-slips (after taxes) and calculate the average earnings from side hustles or other avenues. You’ll also need to lay out your expenses. The easiest way to determine your expenses is to start by listing out the things you pay for on a recurring basis (like your rent or mortgage, insurance, utilities, etc). Often there are expenses that are overlooked or forgotten. To adequately account for these, look back at your last three to six months of bank and credit card statements to determine any additional expenses that you may have forgotten. Your goal is to ensure you keep your expenses well under your income, leaving room to pay down debt, save and invest for your future self.”

With all of us spending so much more time at home, now is the time to do it, and the key to success is organisation. “Success with budgeting requires that you plan your budget in advance of every month, as no two months are the same,” continues Sokunbi. “You also want to track your budget against your daily spending and expenses as the month goes by. The budgeting method you choose is entirely up to you; the most important part is picking a method you will actually use.”

Prepare for a sudden drop in or loss of salary

While the thought of being made redundant isn’t one any of us would like to entertain, in turbulent economic times, it’s crucial to do so. First up: know your rights. According to Bain, your employer must “consult you before redundancy and give you the correct amount of notice”. Furthermore, they must “pay for untaken holidays, offer any alternatives to redundancy,” and “use a fair process so that you’re not discriminated against”. There’s another point to remember during this process that’s relevant to the pandemic: “You’re also entitled to redundancy payments based on your full pay, not your furloughed wages,” says Bain. “So don’t let them get away with that.”

While it’s important to up your personal savings if you think your job is at risk right now, you mustn’t forget about your pension either. “Don’t forget about the pension you leave behind – hold onto the paperwork [from your company],” advises Bain. “You may find in due course that it’s a good idea to move that into one pension plan through an app, like Pension Bee.”

Access financial help when you need it

During the pandemic, many people have availed of financial support from the government. “If you have lost your job or are out of work, you definitely want to determine what unemployment benefits you qualify for and complete the necessary paperwork as soon as possible,” advises Sokunbi. “Next, be sure to let your service providers (like utility companies) and your lenders (like mortgage lenders, credit card companies and so on), know that you are facing financial difficulty and are out of work. Many of these establishments have plans and programmes in place that can help to temporarily reduce or pause payments, waive late fees and stop negative reports to the credit bureaus. However, there is no way for your service providers and lenders to assist you if you don’t communicate.”

Additionally, you can seek help from other organisations. “Citizens Advice is a good port of call for basic employment and benefits advice,” says Bain. “Turn 2 Us offers access to grants and hardships, with an excellent grant finder tool. Keep checking if your professional organisation or union is offering grants, working opportunities or legal help. StepChange can give you free debt advice and help you if your banks or lenders aren’t being co-operative over your debts.”

Make your money go further when furloughed

Being furloughed with a reduced income is tough. With time on your hands, find other ways to bring in a bit more money. “Listing clothes, furniture, books or artwork you no longer need or want on sites like Depop and eBay is a no-brainer, because there is no upfront cost,” explains Bain. “You just need to price highly enough to give you a profit after costs, which typically include shipping and the site’s cut (as well as any fees for secure third-party payment services like PayPal).”

Save money while working from home

No commuting, no coffee run and no grabbing lunch on-the-go has allowed many people to save money after almost a year of working from home. “While some costs may go up in certain areas – like groceries, electricity and internet – there are many areas in which your spending may have been reduced or eliminated,” says Sokunbi. “For instance, commuting costs, daycare costs, daily coffees, eating out, gym fees and even clothing costs. It’s all about being intentional, and putting the money you are no longer spending in these areas away in savings.”

But you can do more. “You should claim tax relief for your WFH expenses,” says Bain. “You need to start keeping receipts, bills or contracts in one place, both physically and digitally, to get this organised.”

It’s still okay to spend to spark joy

During economic hardship, it’s easy to feel pangs of guilt for buying things you don’t necessarily need. However, if something sparks joy it’s not a waste of money. “It’s not mentally healthy to live in an extended state of total deprivation,” says Lowry. “It’s okay to allow for spending on the occasional indulgence, even when you’re in a financially tough time. However, you do need to be realistic about what is still affordable within your current means, and not justify a purchase by thinking, ‘What’s a little more debt?’” Bain is in agreement. “My attitude is that if you can afford it and if you want it, go for it,” she says. “Having a healthy relationship with money shouldn’t be about whipping yourself every time you buy something fun or fancy, nor should it be about constantly depriving yourself and obsessing or worrying about the future. It should be about getting your finances to a place where your spending is guilt-free and enhances your life and wellbeing, and often that’s a combination of having structure, hobbies and fulfilling relationships in your life so you’re not spending to fill a hole, and knowing as a consumer what you love and why.”

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