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 on your lap. You’ll also need to consider your finances and possibly make some money moves. How has your overall money management changed during the pandemic? Have you dipped into your savings? Have you been letting your retirement accounts slide? Or, maybe you’ve been waiting for the chance to hit your favorite retailers again, and you can’t wait to splurge after a 15-month financial fast.
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-related money moves
Pandemic times required their own budget, as people cut down on costs like dining out and updating work wardrobes, but spent more on things like at-home entertainment. Others may have had to adjust their spending to fit a changed income level or to help them coast during a stint of unemployment. The pandemic may have also shifted something in some people’s mental list of needs and wants, as they found they can live with a lot less than they’d believed.
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 months 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, during the pandemic, 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 money moves
The pandemic has prompted many people to reevaluate their goals. Retiring before 50 or spending a month in Europe may not be as important to you as you thought; or it may be even more important now. Similarly, if your family has outgrown its living space, moving to a new one is a financial priority. Or maybe you’ve decided you can live without a second car.
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, consider long-term goals you 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 these apply to you, revert your savings and debt payments back to pre-pandemic levels as soon as possible.
Spend with caution
It’s fine to enjoy a shopping spree to celebrate returning to pre-pandemic norms, but 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.
Also, to make up for lost time, nights out will not bring back the months you spent at home. Similarly, overbuying for this fashion season won’t bring back the seasons you spent at home in a hoodie and sweatpants. To avoid irrational overspending, set up a budget before you hit the shops and only spend what you’ve planned.
The restaurants and movie theaters are open for business again, and mask mandates are dropping all over the country. As life returns to normal, consider the state of your finances and make responsible money moves like those listed here.
Your Turn: What post-pandemic money moves will you be making now? Tell us about it in the comments.
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