If you’re like millions of others, you spent a lot less during the pandemic. The stay-at-home orders and the spread of the virus made it easier for us to spend less and save more. Sure, there was plenty of online spending, but much less spending on food and entertainment.
Now that we’re headed back to ‘normal’ what does it mean for our spending? How do you avoid the bad spending habits you had before the pandemic and keep your finances on track?
Create a Budget
Don’t go one more day without a budget. There’s no way to know how much you can spend or what your finances look like if you don’t track them.
Budgeting doesn’t have to be overwhelming. Create a simple budget that allows you to know exactly how much you can spend in each category. If you find that you overspend in a specific category, learn how to cut back or adjust your budget, making up for the difference in other categories.
Save an Emergency Fund
Our ‘new normal should mean that we are prepared for anything. Millions of people were caught unaware when the pandemic started. Most people didn’t have 6 – 12 months of expenses set aside, which left them financially distraught amid the largest health crisis we’ve ever experienced.
Don’t let that happen again. Save as much as you can toward your emergency fund each month, striving to save at least 6 months of expenses, if not more.
Plan your Purchases
Don’t just spend to spend. Make a list and be intentional about your spending. If there’s something you want, budget for it – don’t just spend.
Your everyday budget should cover the basics:
- Housing
- Utilities
- Food
- Transportation
- Healthcare
If you need anything beyond that, do what’s necessary to save for it or at least make sure it fits within your budget without forcing you to use credit cards or go over your budget.
Spend ‘Smart’
Life before the pandemic was much more carefree. We did what we wanted and spent what we wanted without thinking about it.
Post-pandemic, we must be more intentional about what we spend and where. Impulse buys or needless spending don’t hold as much importance any longer. Today every penny you spend should be intentional.
Ask yourself before you spend. Is this going to help me in the future? What is the opportunity cost of spending this money? In other words, what can I not do if I spend the money on XYZ?
Final Thoughts
Returning to ‘normal spending’ can feel overwhelming. Many of us hesitantly are getting back to normal, but for many, it feels scary.
If that sounds like you or you are in over your head in debt, let the credit counselors at Creditaid help. We’ll help you figure out a debt payoff plan and create a budget for the future. We’ll show you how to save and prepare for the unexpected so something like the pandemic doesn’t take you by surprise. Contact us today.