The COVID-19 pandemic is still raging across the U.S., and it has affected every aspect of our lives. Millions of people have lost their jobs. The federal government passed an enormous stimulus package and may pass another one soon. Most of us haven’t eaten in a restaurant, watched a sporting event, hugged a friend, or boarded a plane in months. Some industries, like movie theaters and cruises, could be forever changed.
At the same time, life goes on. There are millions of people who are still earning the same amount of money, have changed jobs, or even gotten raises during this time. We’ve adapted to working remotely, cooking (or learning to cook for the first time), and spending a lot more time at home.
As we begin to transition back toward normal life — or whatever normal will look like after this — think about what habits from this time you might want to carry with you. They might be good for your finances. Or they might just be good for you.
What To Do While You’re Not Spending
Even if you’re still earning the same salary as you were before the pandemic, your spending has probably slowed dramatically. As a result, you may have more cash on hand than you have in years. Take advantage of these circumstances to become more financially secure.
If you have credit card debt, now is a great time to aggressively pay it down. And if your emergency fund isn’t as robust as you’d like — or if you’re fearing for your job security and would like to have a little extra cash available — make extra contributions to that account.
If you have a longer-term savings goal you’ve been working toward, like putting a down payment on a home, get a jump on that goal by doubling or tripling your monthly contribution to your savings. You’ll reach your goal faster and probably not notice the difference in your day-to-day life.
Finally, think about the times of year when you tend to overspend or go into debt — traveling, holiday spending, or otherwise. Use the money you’re not spending now to build up a buffer for the next season so you don’t have to take on any debt.
Don’t Buy Things. Invest In Them.
Of course fewer of us are buying clothes, makeup, or the other things we’re used to splurging on. Why do we need those things when we’re not leaving the house? And it’s not just you and me — J. Crew and Neiman Marcus, two mall brands that were already in trouble, have declared bankruptcy. Macy’s and Victoria’s Secret are struggling.
Experts have been predicting some kind of “retail apocalypse” for years, and this may be it. I really enjoyed this piece by Anne Helen Petersen in BuzzFeed, where she explores the idea that buying stuff is an essential part of American life — and suggests that the pandemic has upended our desire to buy stuff just for the sake of buying it.
What are we buying instead? Peletons, cookbooks, and kits to learn how to sew, if my friends are any indication. These might be more expensive in the short term, but they’ll have lifelong effects when we get into the habit of exercising, cooking at home more often, hemming our own pants, and more.
Lots of us have also realized that we don’t need all the services we used to think we needed. Four months without a haircut? It really wasn’t so bad. No massages, manicures, or in-person yoga classes? Oh well. Even if you can’t wait to get back to the gym, you may find yourself indulging in these services as treats rather than routines.
To be clear, I’ve never subscribed to the “skip the latte” theory of personal finance. Giving up manicures isn’t going to make you financially secure. But overhauling a bunch of habits at once in an effort, even a forced one, to simplify your life — those savings are much greater than a few dollars per day.
Spending More Time At Home
Everyone I know is cooking more this spring than they ever have before. I’m using everything in my fridge and getting more creative than I’ve ever been in the kitchen. I’m even saying things like, “let me just throw together a light summer pasta.”
I love and miss my local restaurants, as I’m sure you do, but I’d be surprised if any of us miss spending $15 on a salad from a fast-casual downtown spot every day. If you were to replace five days of lunches with home-cooked meals every day, you’d save almost $4,000 per year — enough to fund two thirds of your Roth IRA.
On top of that, it’s hard to say whether we’ll go back to group dinners or meetups at bars, at least in the way we used to. I’m really enjoying gathering with a few friends in my backyard or on my porch. Dinner parties are cheaper and generally a lot more more relaxed, and I think they’ll be a much bigger part of our lives going forward.
If you are anticipating long-term changes that result in spending more time at home, consider spending your money accordingly — on a real desk chair, kitchen tools, or a backyard patio set for your family and neighbors. You may actually use them when we can start having parties again!
Working Remotely For The Long Term
From startups to Fortune 500 firms, companies in a variety of industries are now telling employees they’ll be working remotely for months to come — or, in some cases, permanently. Many more will probably follow.
By now, you’ve proven that you can be efficient and effective from home (despite the completely extraordinary conditions brought on by the pandemic, like having kids at home, which is not usually what remote work is like!). If your company begins to reopen offices in some way, it could be a good time to negotiate at least a partial work-from-home arrangement. Think about how much money you could save — on commuting, food, and a business-casual wardrobe —if you could continue working from home two or three days each week.
If your company has committed to a long-term remote work future and you live in an expensive city, you may have started (or continued) to think about moving to a region where housing is more affordable or where you can be closer to your family. There are dozens of factors involved in deciding where to live, so that isn’t a decision to make lightly. But if a particular industry or career path has kept you tethered to one city and you’ve been aching to leave, it may be more possible than ever.
The world changed this spring — in lots of ways we probably haven’t even realized yet. As the shock wears off, be deliberate about keeping the habits and behaviors from this time that have become valuable to you. There’s no reason any of us have to go back to living the way we did a year ago. Instead, let’s move forward, having learned way, way more than we bargained for this spring.