How lockdown has helped us to save money - and find new ways to spend it
Pricewatch: Meal kits and takeaway pints have become the new camping holiday
Conor Pope in Dublin Airport, where passengers are down to under 300 a day. Photograph: Enda O’Dowd/The Irish Times.
Normally on a lovely June bank holiday Monday like this one (fingers crossed the sun is still shining!) Pricewatch becomes obsessed with summer and travel and the costs that come with all of it.
We focus on where we might get the best holiday insurance and how to avoid being ripped off by car hire companies and how we might see the world on a shoestring - that kind of thing.
But as a summer like no other starts, all that stuff is suddenly irrelevant so instead on this June bank holiday Monday - as we wait for normal times to return at some point and maybe even some point in the weeks ahead - we reckoned we’d take a moment to take stock of what has happened to us all and look at the some of the ways the lockdown has helped us to save a few bob.
We figured we might also highlight some ways we might use those savings wisely. None of this is to ignore the cataclysmic impact the Covid-19 crisis has had on many individuals, families and businesses across the country but rather try and look for even the vaguest glimmers of good news at a miserable time.
1. Overseas holidays:
Let’s say a family of two adults and two kids were planning a camping holiday in France or Spain or Italy for July or August - hardly the most lavish of summer breaks but still not cheap. Given the height of the season, flights for four people would probably have cost around €1600 with the cost of a standard caravan on a not-too-swanky site coming in at least €2000. Add a couple of hundred quid for car hire and the money spent in transit - between random airport purchases and snacks and food along the way - and the cost of that holiday which will now not be taken could easily top €4000.
2. Eating out:
Restaurants have had their doors closed for two months which has caused immense hardship to owners and to staff and wreaked havoc across the wider economy. Standing alongside that, the savings for consumers who have been denied the opportunity to eat out pale into insignificance. But for the purposes of doing our tally, the savings cannot be ignored. If a household was in the habit of visiting a restaurant for either breakfast, lunch, brunch or dinner just four times a month, then the enforced savings since the crisis began will exceed €500 and will climb further until restaurants can reopen their doors again, starting later this month.
3. Drinking out:
Are you ready for a piece of fifth class maths? According to a piece of research published last September, Irish people spend around €800 million in pubs in a normal year. That works out at around €15 million a week in pubs in a normal year. Pubs have been closed since March 15th which means, Irish people have spent €165 million less drinking out than they otherwise might have. There are around 3.5 million adults in Ireland although one in five of them do not drink any alcohol at all which leaves 2.8 million people who do. That means that the average saving per drinking person is €59 since the crisis began, a number we will round up to €60 and double for a two adult household taking the pub savings to €120.
With people prohibited from travelling in excess of between 2 and 5 kilometres from their homes for much of the last three months and anyone who could work from home told to do so and with hundreds of thousands people left with no jobs to travel to, car usage in Ireland has plummeted to virtually nothing. In times past, the average Irish motorist drove 16,000km every year and if the average price of petrol is €1.32 a litre, driving the average family car, which does 12.4km per litre will cost about €33 a week. There has been little or no driving done by anyone in Ireland for 12 weeks, which takes the savings to around €400 to which we will add another €100 to cover savings in terms of wear and tear.
More maths. Let’s say our imaginary two-adult two-children household spends a total of just €20 a week on public transport over the course of a week between buses to work and school, then the savings on public transport are €240.
One of the features of life as we know it now has been the absence of a need to buy or prepare a lunch to be consumed outside of the home. The amounts people would typically spend on such fare - often eaten Al Desko - does vary wildly. But let’s say our imaginary household was accustomed to buying a sandwich, a bag of crisps and maybe some class of drink of a normal workday lunch, then the weekly cost would probably be around €35 per person. There are two people working in our imaginary household, the weekly cost of lunch eaten out of the home is €70 which adds up to a pretty eye watering €840 not spent since the crisis began.
7. Takeaway coffees:
Pricewatch is very partial to coffee. And we drink a lot of it. It is a habit which does not, however, come cheap and while takeaway coffee might be good and quite good for you too - at least according to some studies we have read in recent times - it is not good for your wallet. Irish people lucky enough to still have jobs and able to work from home have now avoided going into their offices on at least 60 occasions since the crisis began. If a takeaway cup of coffee costs €3 and our two fantasy adults were partial to just one cup each per working day, then the amount of money not spent since the middle of March is €360.
With all but essential retailers closed for what seems like forever the opportunity to buy clothes - at least in the real world - has largely dried up. The removal of temptation will have saved many people a lot of money. If a household spends just €200 every three months on clothes then that money is saved - or at least not spent. But that is not all. People who would normally wear fancy clothes for work - and by fancy we mean suits and grown up shoes and the like (Pricewatch can generally get by with jeans and unironed shirts, you see) have not been wearing them so their shelf life has been significantly extended so we will suggest that the savings on clothes is around €300.
The monthly cost of gym membership is anywhere from €30 to €100. It is even pricier in the swankiest of gyms but we will disregard them for the sake of this article. Two adults not spending €50 a month on gym membership for the three months that have just past and the three months still to come will lead to savings of €600.
10. Random shopping:
This page has long said that sometimes spending money is a habit and one which can be broken. We are not talking about feeding yourself or paying for a roof over your head or dressing or entertaining yourself obviously. But many of us are guilty betimes of spending money on stuff we neither need or really want. The last three months has seen that habit upturned for many of us and it has been kind of refreshing and remarkable to get through a whole week without spending a bean on anything other than essential things. The key to breaking the spending habit is - obviously - not going into shops at all and that has - quite literally - never been easier. If all the people in our fictional household would normally spend just €25 a week on stuff that wasn’t absolutely necessary then a further €1,200 has not been spent since the start of the lockdown.
11. Health insurance:
The VHI, Laya Healthcare and Irish Life Health have all either processed or starting processing refunds for policy holders as a result of the Government’s effective takeover of the State’s private hospitals in the early stages of the crisis. How the three companies are handling the refunds differs but people should expect to get back around half of what they pay in the three months between April and June. The VHI is to waive premium costs by an average of 50 per cent for subscribers for an initial three-month period. Laya Healthcare is to provide a cashback payment up to €195 for every adult member and €60 for every child member. A family of two adults and two children will be refunded a total of €510. Irish Life Health customers with advanced plans will get between 36 per cent and 60 per cent of their monthly premium back while those on plans with largely public hospital cover will get rebates of between 17 per cent and 21 per cent. Our imaginary family can expect to get €500 back in the weeks ahead.
12. Grooming room:
Assuming the man in our notional household visits the barber eight times a year and his partner visits the salon once every 10 weeks (plus once for a special occasion), the annual total cost of their haircare alone will reach €800. If we add a further €400 for grooming children plus another €600 to cover the cost of manicures, pedicures, massages, facials, and anything else that a family might once have spent money on, then the annual cost of such things is probably €2,000. If we work on the assumption that all those things are off the menu for four months - some of them will be longer - then the money not spent since the beginning of the crisis comes to around €650.
When all this possible spending which has been rendered impossible or undesirable as a result of the crisis is totted up, it comes to a pretty astonishing €9,810. Some families will be able to add savings made when it comes to crèche and childminder fees to this total. Obviously some of the spending which is not possible has been replaced - people will still go on holidays, hopefully, and they will still need to eat lunch and coffee consumed at home does not come free but there will still be significant savings.
Now, normally, Pricewatch would feel pretty pleased with itself if we could get to the end of a page like this and point to savings of close to ten grand but this is not normal and we are all too aware that the “savings” as they are outlined have come at a terrible cost to the entire country in terms of lost lives, a shattered economy, hundreds of thousands of lost jobs and national stress levels that have frequently gone off the charts.
But wouldn’t it at least be something if some of the consumption habits that many of us have formed over the last 70 or 80 days endured?
NEW WAYS TO SPEND
While there have been many ways our spending has been curtailed, there have also been new avenues opened along which at least some of our money has flowed, many of these avenues would have been unimaginable even three months ago.
1. Takeaway pints:
Not even Flann O’Brien at his most absurd could have come up with a plot line that saw publicans dressing for work as they might on any normal evening before hopping on their bikes to ferry pints of plain to thirsty locals denied access to their locals. But needs must and pubs deserve to be complimented for the way they have managed to keep serving - albeit it in a very limited way - in these most trying of times.
2. Food shop:
For more than 50 years supermarkets have been the dominant force in Irish food shopping and at the start of this year if you had told Pricewatch that its position of pre-eminence could ever be challenged we would have scoffed. But in recent weeks as the two supermarkets involved in the delivery of groceries struggled to cope with the demand for their services small shops and grocers reinvented themselves and started feeding people all over the country and making the lives of vulnerable people safer and the lives of those who find regular trips to shops in the time of coronavirus increasingly stressful more calm. It is hard not to be impressed by the quality of the produce and the speed of delivery from local greengrocers, fishmongers butchers and bakers - as well as the odd dairy and cheesemonger.
3. Meal kits:
Just as pubs and local shops have stepped up to the plate so too have many restaurants and they are offering click and collect and meal kits to help a nation in lockdown cope just a little better with the enforced isolation.
4. Holidays at home:
Irish people who had plans to travel overseas this summer are now looking forward to holidays in Ireland starting, all going well, on July 20th. If people in the Irish tourism sector play their cards right and don’t try and recoup all their losses in one fell swoop by jacking up their prices to ridiculous levels in the weeks ahead, then they might find they have a captive local market for many years to come.
“Bikes are the new toilet paper” is a phrase we never thought we would type until we heard someone using it last week when describing the sudden demand for bicycles among a population suddenly anxious to avoid public transport and navigate urban spaces that are increasingly unable to accommodate private cars. This page has long been a fan of two wheels and cycling is a fast, cheap, wholesome, invigorating, reliable and convenient way of getting from A to B. By taking advantage of the tax breaks available to cyclists and their employers, you can get a decent bike on the cheap. The Bike to Work (biketowork.ie) scheme covers bicycles and accessories up to a maximum of €1,000. Your employer buys it and you pay for it, tax-free, over 12 months, which effectively knocks around 40 per cent off the price.