Remember how a year ago we could barely eat at restaurants, and there was hardly any traveling going on? Many individuals and households spent a lot less in the lockdown months of 2020-2021 than they usually do, which resulted in savings building up. This was one of a few benefits that resulted from the pandemic.
Now things are getting closer to normal with vacation rentals being booked out for months, airports are once again full, and national parks are overcrowded. Spending on things like restaurants, clothing, travel, and self-care are currently high which might lead one to wonder – is all of the COVID saving that many did going to quickly undo itself? Are all those financial gains going to disappear? If we’re not careful, the answer is yes.
Below are some tips for helping us (myself included) not overspend in this post-lockdown world:
1. Control what you see – If you’re like me, you may be tempted to spend more when you see items that you previously didn’t know existed. Had you never seen the item, you never would have spent money purchasing it. The three biggest areas that lead me to spend money when I had no intention of buying anything are marketing emails, social media, and visiting stores in person. To combat this, I try to periodically unsubscribe from marketing emails that I know I’ll be tempted to look at – especially when there’s a “deal you can’t pass up.” It also helps me to simply not go shopping when I don’t need to buy anything, and when I do need to buy something specific, to make a game plan for grabbing that and quickly getting out of the store. And then of course, there are social media accounts that, while helpful in some areas of life, have the intention of causing viewers to spend their money. Not following or unfollowing accounts like that help me spend less. Deleting or unsubscribing from marking emails, avoiding strolling through stores, and not viewing social media accounts that promote products help a ton when it comes to trying to stay within one’s budget.
2. Mentally review wants vs. needs – In our consumeristic society, it’s very easy for the line between wants and needs to get fuzzy. Do I need to eat? Do I need to get most of my meals from restaurants vs. making the same food for a fraction of the price at home? No. Is it okay to go to restaurants and help support local businesses when there’s room in the budget to do so? Absolutely! Similarly, do I need a new pair of jeans in the middle of summer in North Carolina? Definitely not. But did I purchase a pair when there was room in the budget to do so? I sure did, and if I’m being honest, it was actually two pairs of jeans. Fortunately, the mental exercise of recognizing which of my purchases are wants vs. needs helps me spend less on wants.
3. Update your budget if you’ve had financial life changes – Over the past year, many individuals and households have had large financial changes. If your income has increased or decreased, it’s time to update your budget or your holistic financial plan.
4. Review your subscriptions – Many of us picked up monthly subscriptions that we were using a lot during lockdown months, but will no longer need once things are closer to normal life. This might be extra entertainment or streaming subscriptions, or a video conferencing subscription that you used with family and friends when we were unable to actually see one another in person. I’ve also talked to people who simply forgot they were paying for certain subscriptions, so it’s beneficial to review them.
5. Set a reminder to review your budget regularly – While a “set it and forget it” strategy works great for some investment or saving strategies, it definitely does NOT work when it comes to spending. It’s fairly easy to create a budget; the part that takes effort is sticking to the budget. Setting a regular reminder on my phone helps me remember to actually look at my budget vs. actual spending. And the more often I look at my budget, the more it stays top of mind when I feel an itch to purchase something that’s not a need. I also tend to forget past purchases when I’m not reviewing them regularly. The result is that the more I review my spending, the less likely I am to overspend.
6. Embrace it – There are certainly areas in which extra spending might really benefit your mental and physical health. For those areas, and where it won’t have a significant negative effect financially, embrace and enjoy the excess spending – especially in areas like vacation and experiences with loved ones.
I hope these will help you if you’re feeling the itch to spend your excess pandemic savings. In some areas it’s beneficial, but certainly not in all areas. And if you have tips that help you not overspend that aren’t listed here, I’d love to hear them!