Budgeting in a Pandemic: What’s Changed?
There’s no question that the pandemic has changed our spending habits.
There’s been a large shift in consumer spending; people are spending less, and on different things than they were prior to the pandemic.
This shift is due to a couple things:
Health guidelines have kept many shoppers at home and away from physical, in-store shopping, causing industries like dining, shopping and traveling to decrease tremendously. But, industries that cater to an in-home experience, such as food delivery, grocery stores, and video streaming, have seen success.
Americans have also changed their values around money as a result of the pandemic. A recent survey shows that Americans are shifting their spending to more essential items and seeking more value in purchase decisions — thinking more critically about what we are buying. Additionally, small businesses have seen more support as people are becoming more conscious of the companies they are spending money at.
Here are a few personal examples from people in our community.
“I never fully understood how much money I was spending on subscriptions until the pandemic hit and my husband and I started going through our ‘new- normal’ budget. Between my XM radio account, multiple TV streaming services, facial membership, Rent the Runway subscription, and hot yoga membership (just to name a few), I was easily spending over $500 a month that I just let roll-over every month. As we all know, canceling any subscription is about as challenging as being in a hostage negotiation situation, but I made it my goal and gamified my ability to cancel my subscriptions. After evaluating which subscriptions added the most value to our life, and canceling the ones that didn’t, I had an extra $500 a month that we are now putting aside for a down payment on a house. Hey if I am going to be quarantined I need more space than our current 2 bedroom loft!” — Grace McAvoy
“Going through a pandemic has drastically changed my perspective on how I spend my money. I now take the time to think if the purchases I am making are a need or a want. Before COVID I used to think I needed to get my nails done every two weeks. I've come to realize that spending my money on experiences is more beneficial for my mental and physical health. I'd rather go to an outdoor yoga class. Or splurge on a $7.00 latte and go on a social distanced walk around Bde Maka Ska with a friend.” — Sophia Stewart
“The pandemic helped me realize that there were a couple changes I could make to my budgeting to make my money habits better reflect my values and goals. I realized that prior to quarantine, I was spending a pretty hefty amount of money every month on shopping and dining out — what can I say, I like to have fun with my money. Without access to the places I was spending money at before, I started to use my extra money to work self care into my budget (books, yoga mat, plants) and also start putting some money aside for the Volkswagen Beetle that I want. These are for sure budgeting habits that I will continue with going forward now!” — Micheala Newman
Now is a great time to evaluate how your spending habits and values have changed. Think about what you’ve splurged on, and what you have cut back on as well. If you’re one of the many people who has cut back on spending to the point where you have some extra money, there are a few smart things you can do with it!
Put it Towards Your Goals
The pandemic has offered us a lot of time to think about our goals. Whether you want to take an extravagant vacation to Barbados, buy a used car, or save for a down payment on a house, now is a great time to create a plan and put your money toward it.
Invest in Your Business or Side Hustle
Has the pandemic made you think about a potential side hustle or business venture you’re interested in? Now is the time. Invest the extra money you have in yourself — it will pay off.
Investing is a great way to maximize the money you have. Whether you’re new to investing or have a ton of experience, it’s a great way to make your money work for you.. For more information on getting started investing, check out this blog.