Managing Your Spending in a Post Lockdown/Pandemic Life
While the pandemic has put a strain on many people’s finances, in some ways being in this situation also allowed people to save more money by not traveling or eating out as much. As restrictions continue to be lifted, how can we plan to spend our money in ways we enjoy without depleting your savings.
For many of us, the pandemic dramatically impacted the way we spend our time and money. The events of 2020 put a strain on many people’s finances due to the loss of income and stable work opportunities. On the flip side, for some people, being home more allowed them to save on things they would normally spend money on like; commuting, dining in at restaurants and travel.
As vaccinations become more available and restrictions are lifted, you may find yourself faced with a desire to make up for lost time by splurging on the things you missed the most during the last year. Maybe you realized that you actually weren’t spending enough on the things you now see as valuable.
For example, before you may have put off traveling or buying yourself that nice outfit and now you realize that these are things you want to make room for in your budget. You may have also realized that you spent money on things that were not important, and you could actually live without them going forward. In any case, you may find yourself screaming “YOLO-ATP” You Only Live Once After The Pandemic as you hit that “Purchase” button. So here are some tips to help you manage your spending so that you can enjoy life in the present while still being financially responsible:
Evaluate Your Pre-Pandemic & Pandemic Spending
Evaluate how you spent your time and money before and during the pandemic. What were the things that you spent on that you realized you could do without and still be happy? Did you go out to eat a lot before, but have since discovered a love for cooking and now want to continue to cook more meals at home? Did you realize that you didn’t travel enough and want to travel more? What changes do you need to make as it relates to your spending going forward?
Plan and Budget for Your Post-Pandemic Spending
Begin to think about the activities/things you want to spend more on and set a budget. Then, plan out how much you need to save monthly to reach that specific goal. For example, if you want to plan a nice trip in 2022, how much will that vacation cost and how can you save towards it over time so that you can take that vacation guilt free? If you’ve decided to cut back on spending in an area going forward, put that money towards something else you determine is a priority. Look into opening a savings account to help you keep focused on that goal. For example, DCU – Digital Federal Credit Union has a Primary Savings account that offers their members an Annual Percentage Yield (APY) on eligible balances — that’s higher than many savings accounts.
Continue To Look for Deals and Use Any Available Points for Splurges/Travel
Find ways to still save on the things you want to do. If you’re looking forward to traveling, check out travel sites and shop for hotel deals. If you’re looking forward to going out to eat more with friends, see if that restaurant has promotions or menu specials. Also, don’t forget to check your credit card for unused rewards points that can be used towards travel or other items.
Continue to Save for your Mid-to-Long Term Goals
Don’t abandon your mid- and long-term goals for some short-term fun. Look at how you can still save toward your future mid-to-long term goals while spending in reason for the things you want to do now. If you can, contribute an additional 1% towards your 401k or add an extra $50 a month to your emergency savings. While these amounts may seem small, they could add up over time if you can stay consistent. Check out DCU’s Savings Calculator to see how much you could save for your goals.
You may find yourself tempted to lean in more on spending and enjoy the now but don’t completely sabotage your future goals. There is a way to find a balance if you evaluate, plan for and set aside money for the things that you value.