While it’s easy to say ‘don’t overspend’ after the pandemic, the truth is that just under half of all Americans will heal themselves with it. traveling or shopping, even if it means going into debt to do so, according to a recent vsreiteratedards.com report. With that in mind, here are some tips for contain these expenses so you don’t get into too much debt.
Reassess your finances before your shopping trip
Your personal financial situation has likely changed since the start of the pandemic, whether from deferred student loan repayments or the number of TV streaming subscriptions you have accumulated. Simply list your income and expenses (per month and per year) and writing down your financial goals can go a long way in helping you minimize overspending.
After all, if your new spending priority is a few thousand dollars on travel, you may find that it’s more achievable if you cancel or reduce other expenses that suddenly seem less important after the pandemic. That is why we recommend a subscription audit as part of your reassessment, as you may have forgotten some recurring expenses (like that Peloton app subscription that you never use, for example).
What if you don’t keep a budget? This Lifehacker article will walk you through this.
Make sure your emergency fund is taken care of first
An emergency fund is a reserve of money that will cover unforeseen expenses related to job loss or health costs. Ideally you want at least three months (if not six) of your recurring expenses covered by an emergency fund. If this fund has been depleted by the pandemic, consider replenish this fund before planning any big discretionary spending, if you can.
Consider spending to improve yourself
There is a distinction between “having fun” and celebrating a return to normalcy. For example, I was playing with the idea of buying a new gaming laptop as a “reward” for spending less during the pandemic. But then I realized what was really motivating my urge to spend was the need to break my routine, and that I actually preferred to socialize more and get out into the non-digital world and in fact do things. As a result, I signed up for a recreational sports league rather.
Of course, everyone has different priorities, but consider splurging on self-improvement – classes, book clubs, signing up for a personal trainer – as these activities can be both cheaper and more rewarding to spend. long term compared to travel or shopping.
Track your post-pandemic spending
Similar to food tracker apps, constantly tracking your spending can sometimes help you identify bad habits, like making unfortunate online purchases out of boredom as it is 10 p.mr. and you had a few glasses of wine.
Ideally, your monthly budget should include some room for discretionary spending. As you track your daily expenses, you may find that you are spending more than what is budgeted for, allowing you to adjust accordingly. Also consider the 24-hour rule for discretionary spending: IIf you really want something, waiting for a day can’t hurt.
Expect inflated travel prices
As we have already discussed, supply issues and increased demand have driven up the prices of many items, especially those related to travel (cars, hotels, gasoline and Restaurants). Before embarking on a big trip, create a shortlist of destinations and compare estimated costs first, as the price differences might surprise you.
For example, rental cars booked at airports cost double or triple what they used to be. In this case, flexibility is preferable: Yesou will want to plan your trip about the rental car (and where you’ll pick it up) to ensure the cheapest price, or maybe even avoid rental cars altogether. This also applies to hotels and airline tickets. A little planning will go a long way.