3 Ways To Maintain Your Pandemic Savings Habits
By: Stacey Nickens
The pandemic was a devastating and challenging experience for our country, but quarantine restrictions may have helped you build healthier financial habits. Instead of eating out, you may have cooked more dinners at home. Instead of dropping money on expensive vacations, you may have opted for modest staycations.
These behavioral changes may have boosted your savings, and you wouldn’t be alone. At the end of May, US consumers had accumulated over $2.1 trillion in savings during the pandemic. Analysts accordingly expect consumer spending to bounce back now that reopening has begun. However, what if you don’t want to go back to spending in the manner that you used to spend? What if you want to continue to bolster these healthier financial habits, such that your savings continue to grow?
First, identify the healthier habits that you built during the pandemic. You may have…
- Put money in savings as soon as you received your paycheck
- Cooked at home instead of eating out
- Saved up for big purchases instead of putting them on a credit card
- Cut down on impulse purchases
- Spent more time entertaining yourself at home instead of going to a theatre, a bar, or somewhere else
Write down the habits you want to stick to, and then write down why you want to maintain those habits. It will be easier to maintain a habit if you form a “contract” with your future self, a contract that helps you remember the connection between the habit and your goals.
Next, prepare for the fact that your temptation-free environment may be changing significantly. During the pandemic, it was easier for many families to save because they didn’t have as many temptations. Restaurants were closed or only seating a limited number of people. Travel was limited. However, as vaccine distribution continues, there will be more opportunities for you to go out and spend money.
It can accordingly be helpful to think through behaviors that you may find tempting. These behaviors could include eating out with friends or going to the mall and spending spontaneously. Think through the needs that these behaviors satisfy. For example, eating out with friends may be more about your need to socialize than to go to a restaurant. Finally, brainstorm cheaper activities that can still meet those needs. With the restaurant example, you could suggest a weekly, at-home dinner club with your friends, rotating the host each week.
After you’ve done this brainstorming, it can be helpful to think through barriers that will prevent you from breaking your healthier habits. You could set a spending rule for yourself, such that you have to wait three days before spending money on something that’s not in your budget.
Regardless of your goals, using the above three steps can help you build upon healthy habits created in quarantine. There may be more spending temptations moving forward, but that doesn’t mean your savings have to suffer. At the end of the day, remember that it’s more important to invest in your future self than to buy a new pair of shoes.