As states begin to reopen and the whole world strives to figure out what “new normal” looks like, one question we should be asking ourselves is what does a “new normal budget” look like. As things like travel, more regular dining, and various activities become available to us again, now’s a great time to look at and update your budget! Here’s some steps you can take to do so:
Consider which quarantine costs you can go without!
As some combination of fear, boredom, stress, and anxiety plagued nearly every individual this past year, it’s likely that you added in at least a few new expenses to help you cope with the situation. Whether you increased your entertainment subscriptions, found a new crafting or gaming hobby, became a fully blown chef or wine connoisseur, or turned to retail shopping to fill time and tamper nerves, all these activities cost money.
If you find yourself wanting to meet for outdoor brunch or start traveling, but not sure how to fit it into your budget, consider which expenses you can do without considering you’ll finally be spending more time off the couch than on it!
Restructure your savings and debt repayment plan
As things shut down in 2020, so did certain savings and debt repayment goals. You may have decided to pause savings for travel or found that your federal student loan payments were postponed, and therefore had more money to send elsewhere. Maybe you reallocated these funds to high interest debt, such as credit cards, toward fully funding your emergency savings, or even towards creating a home office. But now’s the time to reinstate savings and debt repayments for your ideal “new normal!”
When setting savings goals, try to be as honest with yourself as possible! For example, when creating a travel savings bucket, do you see yourself taking local road trips or dusting off your passport the second borders reopen?
And if you’ve gotten used to life without student loans or any other debt that may have offered temporary relief, it’s time to practice your payments. Simulate payments to either a savings goal of choice or another debt you are tackling by making a transfer for the same amount as your minimum payment. This is particularly important right now, so you don’t get used to having an extra $100 or more to spend on friends’ gatherings and other recently rediscovered activities!
And if you are looking for help saving money on your student loans or working towards forgiveness, get in touch with a service like Savi that can help you through the process.
Be okay with saying no, but prepared to say yes!
As we get the green light to see friends and family for the first time in a very long time you may feel like you are being pulled in many different directions. Remember, it’s okay to say no and you aren’t obligated to see folks just because it’s been a while.
On the flip side, be prepared to say yes! Whether it’s via a travel savings fund as previously mentioned or an “Oh wow” fund for whatever opportunity comes your way, setting some aside now will allow you to say yes in the future.
Be mindful and track your spending!
Lastly, the prospect of the world reopening (slowly, but surely) is both exciting and a little bit nerve-wracking. As we remember how much fun it can be to see friends and family on a more regular basis, it can be easy to swipe all things financial under the rug. Having a plan and a way to check in on it is the first step to making healthy financial decisions and avoiding financial anxiety. So whether you cut expenses, restructure your savings, practice debt payments or not, make a plan and stick to it!
P.S. While I hate to be the bearer of bad news, if you are being called into the office for the first time since March of last year, don’t forget to factor in transportation costs… And finally, you’ve got this!
