Post-Pandemic Money Moves
Re-acclimating to normal life as pandemic restrictions are lifted and businesses reopen across the country will mean more than just getting used to wearing real pants again and working without your cat walking across your keyboard during Zoom meetings. You’ll also need to consider your finances. Have you dipped into your savings? Have you been letting your retirement accounts slide? As you prepare to leap back into normal life, proceed with caution. Be sure to consider your full financial picture as well as long-term and short-term goals.
Here are some forward-thinking money moves to make as you adjust to post-pandemic life.
Review and adjust your budget
Pandemic times required their own budget, as people cut down on costs like dining out and updating work wardrobes, while spending more on at-home entertainment and new hobbies. Others may have had to adjust their spending to fit a changed income level or to help them coast during a stint of unemployment.
As you adjust to post-pandemic life, take some time out to review and tweak your monthly budget. Be sure to incorporate any changes in income, as well as a readjustment to pre-pandemic spending or changed priorities. You may need to review and adjust your budget, and maybe even your spending behaviors, every few weeks until you find a working balance.
Rebuild your savings
If you are one of the many Americans who were forced to dip into savings, or even to empty them completely, it’s time to create a plan to get your savings back on track. Tighten up your spending in one area until you’ve built up an emergency fund that can keep you going for 3-6 months without an income, or use a windfall, such as a work bonus or tax refund, to get the bulk of your emergency fund in place.
Once your emergency fund is up and running again, continue to practice basic saving habits, such as setting aside 20% of your monthly income for savings, or whichever approach you prefer. If the pandemic taught us anything, it’s that it’s always best to be prepared, because you never know what can happen.
Rethink your long-term and short-term financial goals
The pandemic has prompted many people to reevaluate their goals. Retiring before you hit 50 or spending a month in Europe next summer may not be as important to you as you’d originally believed; or it may be even more important now. Take some time to rethink your long-term and short-term financial goals and adjust your savings and budget accordingly.
As you move through this step, be sure to consider any long-term goals you may have put on hold during the pandemic. Have you stalled your contributions to your retirement accounts or toward your child’s college tuition fund? Have you been making only the minimum payments on your credit cards? If any of these apply to you, be sure to revert your savings and debt payments back to pre-pandemic levels as soon as you can.
Spend with caution
It’s perfectly fine to enjoy a shopping spree in celebration of a return to pre-pandemic norms, but it’s best to spend with caution. First, prepare to encounter inflated prices wherever you go. Gas prices have jumped recently, and costs of many consumer goods have spiked as well. If you planned to purchase a big-ticket item, consider waiting it out a bit until prices cool off. Second, don’t try to make up for lost time. No amount of nights out on the town will bring back the time you spent at home during quarantine. To avoid irrational overspending, set up a budget before hitting the shops.
As life returns to pre-pandemic norms, or the “new normal,” be sure to consider the state of your finances and to make responsible, forward-thinking money moves.
Your Turn: What post-pandemic money moves will you be making now? Tell us about it in the comments.
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