Life (mostly) After the Pandemic
by Melissa Tosetti & Kevin Gibbons
All across the United States, people are getting vaccinated and governments are easing restrictions. While we may have to deal with the COVID virus for many years, in a lot of ways, life will be starting to open up over the next several months. How will this affect your personal finances and spending?
When we work with clients who have recently retired or will be retiring soon, one of the topics we address is how to spread out their new found time with their spending so they do not decimate their retirement funds in their first year.
A similar effect may occur with you as you emerge from isolation and your social circle opens up. While many people have suffered a loss of income during this pandemic, others may have a bit of extra money because they have had few lifestyle expenses for the past year.
Having a plan is once again crucial. You don’t want to go crazy in the first four months and then find that you have spent significantly beyond your means and are now saddled with credit card debt.
Take time to plan what you want to do and when you want to do it. When possible, time phase your experiences so you can enjoy and remember them, as well as fit them into your Spending Plan.
Have you ever had the experience of accidentally booking yourself for three or more weekends in a row? Even if you are excited about those engagements, at some point you will become too exhausted to enjoy any of them. With a little planning, you can enjoy all of your experiences and stay withing your Spending Plan.
Remember the power of the word “No”. It will be very tempting to say “Yes” to everything and connect with all your friends and family.
As we just mentioned, this can be physically and emotionally draining. It can put you in Reactionary Spending Mode where you are spending because you do not have enough time to make the best decisions or execute critical tasks or habits. A perfect example of Reactionary Spending is eating out because you have not left time to go shopping or cook.
Another thing to keep in mind is that several factors regarding prices may happen in the coming months:
Some costs around travel and entertainment may drop significantly as providers offer sales to get business back.
Some costs may increase significantly as supply cannot keep up with demand.
Some activities and locations will probably be very crowded when they first re-open.
Consider all of these factors when making your plans.
If something is crowded and expensive, can you wait for the tide to slow down before purchasing? If something is on limited sale, does it make sense to jump now?
There is no one right answer. You just need to stop and evaluate what is best for you in your situation.
With the world starting to go back to normal, we have a lot to celebrate. Enjoy and celebrate to the level you are comfortable with. Just take the time to make a plan so you are doing it with your short and long-term spending goals in mind.
When the euphoria of the “End of the Pandemic” passes, there is still a lot of life left to live.
Melissa Tosetti & Kevin Gibbons are cash flow planning experts and authors of the international bestseller Living The Savvy Life.
For the past nine years, they have worked with over 650 individuals and families to create Spending Plans.
To learn about the Spending Plan process, visit The Savvy Life’s Home Page. If you’d like to learn about how The Savvy Life works with financial advisors and their clients visit: The Savvy Life Advisor’s Page.
