The current COVID-19 pandemic has caused upheaval in all areas of life. Things that we all normally took for granted, like the kids going to school, the summer vacation, and the freedom to travel wherever we want were all restricted. Many households were also negatively affected financially. Many people lost their jobsand many others had cut their incomes.
The changed circumstances also led to changes in spending habits and not always for the better. In this article, we're going to look at people who shared some of their spending experiences during the pandemic. Listen to their stories and think about your own situation. Then we will also look for ways in which we can improve.
Buy the same things everyone else wants
First, it was toilet paper and hand sanitizer – no matter how much money you had, in March and April it was almost impossible to get any of these products. When these items were back in stock, other things became scarce. When the gyms closed, purchases of home exercise equipment skyrocketed. Sewing machines for making masks also flew off the shelves. And of course the laws of supply and demand have caused the prices of these items to go up.
Anna Barker, founder of LogicalDollarsaid that “at the beginning of the lockdown, I joined the hordes of people who decided to play sports at home. Unfortunately, the fact that many of us shared the same thoughts caused the price of basic fitness equipment to skyrocket. I ended up paying almost three times the usual price for a few simple things. "
Don't change the budget to accommodate new realities
If your income changes, it is important to adjust your budget to suit your new situation. Andy Hill from MarriageKidsandMoney.com notes that “during the pandemic, our incomes fell significantly. Unfortunately, we haven't changed our spending enough to adapt to the new situation we faced. Stimulus checks, returned summer camp fees, and tax returns during this period gave us a false reality of our true income. "
Jason Steele, credit card expert for Money.com"It's easy for him to look at the travel or other expenses I incurred before the pandemic and say," I should probably have saved my money for what may have been the ultimate rainy day. "I'm a bit frugal in general, but I had a good year last year and probably should have saved more than I did."
Much more time at home also resulted in many people making purchases that they might not otherwise have made. Scarlett McCarthy out Literally broke said she “bought a $ 450 infrared sauna blanket (something from an accident). I've watched it for a while and kept getting targeted ads. I ended up adding it to my cart and going through the buying process because I like to pretend I was shopping. I think they had my credit card information saved because the charge went through. Oops! I keep it and love it. "
Invest at the forefront of the market
If you don't have a crystal ball, it's hard to know where the stock market might be going. It is much better just to invest regularly and not worry about the timing of the market. Riley Adams, CPA and owner of Young and the invested announced that he and his wife have decided to open up 529 accounts for our son in early February. We deposited funds near the top of the market and have only recently seen green in the account. We don't regret adding the money to the account, but it would certainly have been nice to wait a month. "
If you were unlucky enough to put your money near the top of the market on February 20th, you saw an immediate 34% drop in your investment balances. Hopefully you followed the advice to "do nothing"- If you invested your money in the stock market instead of pulling it out, the market would have returned to its February highs by August.
What to do with a second stimulus check
The Congress is still debating whether or not there might be a second stimulus check and who might be eligible. It is probably not a good idea just to make concrete plans on how to spend that mythical money until a bill is passed.
Regardless of whether or not there is a second stimulus check, there will be many times in your life where you will get unexpected gusts of wind. That could be a tax return, a great commission at work or Win the lottery. Many of the principles remain the same. The first thing you want to do is make sure you have a budget and an emergency fund.
Finally, consider using part of your windfall to help others. You might be tithing your church, donating to a charity you support, or supporting local businesses. The way you help others is up to you, but there are many benefits to doing so.
Dan Miller (26 posts)
Dan Miller is a freelance writer and founder of PointsWithACrew.com, a website that helps families travel for free / cheap. His home base is in Cincinnati, but he tries to travel the world as much as possible with his wife and 6 children.