The Covid-19 pandemic has been life-changing for people around the globe. It has undoubtedly affected some people more than others, but its reach and impact have been felt universally.
As with all events of this magnitude, it has also altered priorities and changed habits. As a result, people have had to do things differently. Pandemic-related financial setbacks have altered the financial outlook for many people. They’ve had a serious look at how money is earned and spent, and in some cases, new habits have been formed.
The big question is, which of these new habits and outlooks are healthy and should be retained once everything goes back to normal, whatever that might look like. Let’s take a look at three healthy financial habits that you should keep post-pandemic.
1. Saving, Investing, And Debt Repayment
According to most reports, US citizens have saved their money more than ever during the pandemic. Lockdown restrictions, limited travel, and spending less money on entertainment play a part here. In some cases, people have slashed spending out of caution and fear of future job losses.
Whatever the reasons, saving is something we should all do more of and a habit worth keeping around post-pandemic. As restrictions drop and we start going back to normal, financial experts warn of a ‘revenge spending’ mentality that might develop. It’s a good idea to avoid spending money unnecessarily just because you can, and instead, use your savings to pay off debt and invest!
Investing And Debt Repayment
We all strive towards being financially stable, and there is no better way to achieve this than by paying off debt and investing your money. Current interest rates are very low, and this is an excellent opportunity to refinance some of your debt and save money on interest.
The lower interest rates also mean that traditional savings accounts can’t provide the interest you need to counter inflation. Now is the perfect time to take some of your savings and make intelligent investments. It’s always best to work with a financial professional to help you make these decisions. Working with a financial professional who can look at your age, financial situation, and other factors will help you determine your risk tolerance and the best platforms for investing.
2. Sticking To Your Budget
Whether by choice or necessity or both, many people have been diligent about sticking to a budget during the pandemic. Uncertainty around the future and the prospect of job losses spurred many people to make more intelligent financial decisions.
Establishing and being disciplined about a budget can help cut unnecessary spending and increase your savings. This is definitely a habit that we hope sticks around long after we’re through the worst of the pandemic. Here are some ways you can keep your budget at the forefront of your mind.
Sleep On Large Purchases
Big purchases, especially non-essential ones, require some thought. Avoid impulsive buys by giving yourself a couple of days to decide whether you need to make a large purchase or not.
Avoid Extra Debt
While some debt (mortgages, auto loans, and rainy day credit cards) may be unavoidable, it’s best to steer clear of debt where you can. For non-essential purchases, hold off on making a purchase on credit. Instead, aim to save up the money and make the purchase later.
Lower Your Credit Card Limits
Another great way to live within your means and stick to your budget is to lower your credit card limits. This can reign in overspending and help you spend within your means.
Spring Clean Your Subscriptions
Sticking to your budget means getting rid of the things you don’t need, and checking your subscriptions is a great place to start. Look at magazines, streaming services, apps, and other subscription services you may have purchased to evaluate whether or not you still need or even want them. Cutting down on unnecessary recurring costs is a great way to pad your budget!
Many people dined out, traveled, and shopped far less than they had before lockdowns occurred. While much of this change in behavior can be attributed to lockdowns and the fact that people couldn’t spend on certain things, it can be good to reflect on the impacts these changes had on your pocketbook. While you may want to begin enjoying some pre-lockdown activities, remember that you survived without some of the extra spending you were once doing. Look at how you might carry some of those savings into the post-pandemic world.
3 . Investing In Yourself
Our third and final financial habit is critical: invest in yourself. The pandemic rearranged life for everyone. Many people were forced – or chose – to change career paths or fields. Discovering new ways to earn a living often requires continuing education and training in new disciplines.
As a result, there was an uptick in online learning and the gig economy flourished. Both cases are examples of people investing in themselves. On one hand, many people saw the merit of teaching themselves new things and sharpening their existing skills. Others decided to hang their own shingle and invest in starting their own businesses.
Taking online courses, achieving new certifications, and going into business for yourself are all healthy, positive behaviors that will benefit people now and in the future. The best way to find new opportunities is to create them for yourself, though this often involves an investment of some type, whether in time or money.
If Covid-19 has taught us anything, it’s that nothing is certain, and we never know what’s around the corner. However, spending your time and money on bettering yourself will never go to waste and can only improve your life and the lives of those around you. It can also prepare you for challenging times.
It’s important not to forget the valuable lessons we’ve been taught and the good habits we’ve formed. Hopefully, you’ve realized the importance of sticking with your healthy financial habits. So, until next time, save well, spend wisely and stay safe!