It’s safe to say that the coronavirus pandemic has irrevocably changed the way we work, learn, and socialize. While 22% of slip and fall accidents result in more than 31 days away from work, many Americans have been unemployed for months as a result of COVID-19 closures. Understandably, you might be worried about how your lack of income might impact your financial stability. And if you do have unemployment benefits coming in (or you’ve been lucky enough to be able to work remotely during this time), you may still want to know the best ways to save your money in the event of an emergency.
You’re definitely not alone. Roughly 48% of Americans surveyed indicated they were re-evaluating their living expenses in light of the pandemic, with 59% saying they’ve cut their budgets and 34% saying they’ve put an emphasis on saving more. That said, there are areas that have seen more spending than before — and it may even be a good idea to make some smart purchases during this time. Let’s take a closer look at pandemic saving and spending.
It’s Advisable to Save…
Of course, saving as much as possible for the future is always recommended. Recent statistics show that up to 70% of all business partnerships fail — and if your employer or the business you own has struggled during the pandemic, you’ll want to squirrel away as much as possible while you can.
Some of your efforts to save may have been made easier by industry closures. Approximately 80% of Americans saved money on dining out during the pandemic and 75% said they saved money that they would have spent on vacations. Since most restaurants were closed for table service and travel plans were out of the question, not having to foot those bills for a few months can make your bank account much healthier. Around 73% of Americans said they saved money on buying clothes thanks to the closure of retail shop locations.
Still, that may not be enough to get your budget in order. During this time, you should do what you can to create an emergency fund — ideally, with at least three to six months’ worth of expenses. You should generally avoid taking on any new debt, make adjustments to live below your means for the foreseeable future, and seek alternate sources of income in order to bridge the gap. You should also take care to avoid scams (which tend to come up in times of economic downturn) and delay retirement if the pandemic has forced you to dip into your retirement accounts. If you have options for financial relief, be sure to explore all of them.
…But Spending Isn’t All Bad
We’ve seen an increased emphasis on the importance of saving. But the reality is that many Americans are spending more during quarantine. The difference is where they’re spending their money. Approximately 57% of Americans say they’ve spent more money on groceries, which aligns with a Consumer Price Index report that indicates April grocery bills increased nationwide. This could, of course, have to do with interrupted supply chains and increased product prices to keep up with demand. Around 53% of Americans spent more on cleaning products, while 33% spent more on takeout food. Roughly 32% spent more on streaming services. After all, if you’re stuck at home, you want to make sure to be well-fed and well-entertained.
Overall, 45% of people surveyed have indicated they’ve spent more overall during quarantine. But what exactly are you spending your money on? Online shopping can be fun, but it’s important to limit these orders to necessities. Lots of clothing stores are offering products at deep discounts in order to survive — but if you don’t truly need these pieces, you’re going to end up living above your means (or dealing with a delayed returns process due to the pandemic).
If and when you do spend money, try to make it count for your community. Although Taco Bell had enough financial resources to debut a 1,080-square-foot pop-up store in California in 2017, you may want to limit your financial support to locally owned eateries that could really use your assistance. According to CNN, the coronavirus pandemic may end up killing off 80% of the nation’s independently owned restaurants. If you’re in a position to do so, order directly from local restaurants (and skip delivery apps, which may still charge these businesses a fee) to get your takeout fix. Instead of placing an order from Amazon, take the time to call an independent bookstore or hardware store in your area to see if they have what you need and can accommodate you. This can ensure your money is going to the right places.
To that end, you may want to learn more about donating to local organizations. Even setting up a recurring monthly donation of $10 can provide some much-needed relief for vulnerable populations in your area. And if you have some expendable income and want to reap the rewards yourself? Find out about investing in stocks. Although it’s not quite as good a time to buy as it was at the start of the pandemic, you needn’t shy away from investing during this time. Should you have the resources, you may want to talk to a financial advisor about your options.
It’s easy to see why many people are currently in a financial panic. But as long as you make smart decisions about your spending and save as much as you can, you’ll be able to weather this monetary storm.
SUBSCRIBE FOR MORE! HERE'S WHY:
1. You get 7 free books
2. You get the best money & productivity articles
3. You get the latest updates - all in one email per week