Among the myriad of lessons we have learned during the Coronavirus pandemic, perhaps the toughest and most important realizations are how much we really need, and what we can live without.
The PAX team can help you with this.
In fear of being stuck at home indefinitely, in fear of losing income, in fear of fear, many Americans rushed out to buy things in bulk. Some of this stockpiling made sense: We were told to prepare to hunker down for a few weeks, and with a virus running rampant, it would seem smart to have things like disinfectant wipes, hand sanitizer, dry goods and toilet paper. But at some point, many of us disconnected from reality and bought things we didn’t really need, or bought way too much of things we did. Like 300 rolls of toilet paper and 50 bottles of hand sanitizer. This fueled the panic as others began to find empty shelves. When things were restocked, many who already had an overabundance of supplies continued to overbuy, kicking off a vicious supply-and-demand cycle and even busting some people’s budgets.
As the country starts to reopen, let’s think about what it is that we really need. Below are some suggestions to help you navigate through this trying time.
Create a Two-Week Plan
Before you head to the store, make a list.
The more prepared you are, the less likely you’ll buy things you don’t need, forget things you do need and disregard your budget.
Your list should include everything you need for your household. Ask your family members about what they need and want to get through about two weeks. Check your pantry, refrigerator and freezer: What do you have, and what do you need to make a meal plan for two weeks? What staples are you low on?
Don’t forget to check on non-grocery items too, such as bathroom supplies, paper products, cleaning essentials, laundry detergent, pet food, etc.
When you get to the store, stick to your list and buy what you’ve written down. This way, you’re less susceptible to spend more than you can afford, buy more than you’ll ever use and, most importantly, take food and other essential items on the shelves that you don’t really need but others might.
It’s OK to buy two or three bags of your kids’ favorite snack, especially if it’s on sale. But you don’t need to buy all the bags. The same goes for toilet paper. It’s natural to want to stock up with more than two weeks’ worth, because toilet paper has been hard to find for many people lately. But remember, this is not the end of the world and it’s not the last time you’ll ever get to the store. Every package you buy is one less package available to shoppers who come after you.
Check Your Budget
Whether or not your income has changed due to being laid-off or receiving unemployment benefits, you should do a budget review and update it if necessary, because chances are your expenses have changed. While you may be spending much less on gas, dining out and entertainment, you may be spending more on utilities and groceries if your entire family is suddenly home all day every day. For help, read our recent blog post: A Comprehensive Financial Planning Checklist for the New Coronavirus Environment.
If your income has dropped, see where you might be able to make some changes. If your income hasn’t dropped, maybe you can increase your savings or temporarily pay more toward things like student loans, credit cards or your mortgage.
Because of the current state of the world, this budget revision may need to be an evolving process. Your income may change again. Your expenses could fluctuate again in the next few months. Think of your budget as a money map – knowing where your money is coming from and where every dollar is going can be empowering.
Avoid Boredom Shopping
Many people have a lot of time on their hands right now, and it can be tempting to do a little retail therapy in the comfort of your home and have online purchases delivered. But try not to splurge on things that no one could argue are essential, like a designer handbag or a frivolous monthly subscription delivery.
If we’re talking about buying some board games to help pass the time, as long as you’ve got some wiggle room in your budget, these purchases won’t likely break the bank. (And let’s be honest – if you’re a parent, you could make an argument that things like this may be a necessity to survive the next few months.) But when you start making emotional purchases, it can be a bad habit you don’t want to pick up. It might make you feel good momentarily, but whatever it is probably won’t be worth the eventual guilt and regret.
I, too, like to buy things, but here are some tips to making good buying decisions: How to Spend – Tips From Your Financial Life Advisors San Antonio. It can also be helpful to find out how you really feel about money and why you’re making financial decisions the way you are.
Times are tough right now for many people. And frankly, no one knows what the future holds, whether that is a return to normal life in a few months, extended stay-at-home and social-distancing orders as the virus lingers, or something in between. But for now, remember that we really are all in this together and we will get through this.
No matter what your new normal becomes, remember to stay the course and don’t let fear and uncertainty guide your financial decisions – or your spending.
If you’re looking for help with your financial planning needs, contact us. The PAX team is here for you.
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