Let's keep the positive impacts of Covid19 on our spending and saving habits!
During recent times, I read many articles and reports on how spending and saving habits have changed in the United States. They contain different figures and levels of details.
I a nutshell, the impacts were:
People spent less on things like eating out, trips, clothes, activities like gym or movie theaters, and buying other "stuff and gadgets"
People spent more time home, did more cooking, so they needed more money for grocery and house and home office-related expenses
For many people, it was the first time they started thinking about their spending habits and making a budget
The balance of savings account was growing, as people want to have an emergency fund and be prepared for another crisis and because of the fear of losing the job
People try to support local businesses more than before the pandemic
If you are interested to get down to the nitty details, like what exactly people are cooking and eating or how much they save, I recommend you take a look at those figures. More visualized data and details about different spending categories are shown in this article.
Let's think how would our life look, if we would keep the positive impacts alive also after the pandemic:
Think before spending money: Having a spending plan (aka budget) keeps the spending in control, not more money is spent than is earned.
Select the activities: We will return to some of the old activities for sure, but the pandemic has learned that we might not need all of them. Less is more: it costs less money - and it gives us more not pre-planned "value time" for ourselves and our families.
Buy less stuff, but buy with impact: We don't need so much, but buying more durable, possible local manufactured things helps everybody.
Be prepared: Having some savings in an emergency fund gives confidence for the future.
Following those principles would lead to a bit more frugal, less materialistic lifestyle and lets room for new personal experiences and developments as it takes out some stress of our lives.
This might sound like a scary and restrictive lifestyle. Indeed it might take some time and adjustment to realize the benefits, but it is worth the try. You might even feel happier with less, compared to the fully-loaded life. I remember having a similar type of experience after being forced to reduce our family's expenses drastically due to relocation and job changes. Although those steps have been our own choice, the resulting adjustments were not easy at the beginning: Having less disposable income and therefore planning all expenses more carefully and cut on some - buying grocery's based on specials and seasonal offers is another mindset than just buy what you want most that day. Looking for cheap and free family activities and taking your own food in order to avoid buying something was not always easy. And we missed the possibility to travel more often to our home country and see our families. But overall I still remember those years as some of the happiest of my life! I got a lot out of it and enjoyed having the freedom to define and live my life with less stress. Happiness is not bound to spending money .
BUT: In order to prevent swinging back to our old lifestyle after the pandemic, we need to be proactive. It starts with the assessment of our personal values as they are the foundation of our spending habits. Then we can define our needs and wants and create a budget. This will the spending plan to follow. And then, most importantly, we have to commit to this plan and hold ourselves accountable.
Now is the perfect time to make a lasting impact on our way to manage money! Start now and benefit from experience of the life during the pandemic for defining your "new normal". If you feel you need a helping hand supporting you, talk to a Daily Money Manager.