How I turn a silver lesson in a pandemic into a habit
This year promises to be a wonderful summer for us.
Eligibility for the vaccine is expected to open to all Americans no later than May 1. Soon we will be able to freely visit our family and friends, travel and socialize again. Excited people will get their fix.
It’s so energizing to think about it. But then the anxiety sets in.
Post-pandemic life, experts predict, could look like the Roaring Twenties again: forgiving and prosperous. Before long, the attraction of restaurants, bars and birthday parties will be too enticing to resist. What I call “social spending” will pick up.
In fact, it is already happening. After throwing away my social calendar in mid-2020, I had to buy a new calendar recently. I prefer a paper calendar to my phone to keep track of all my upcoming events and appointments. I’ve already booked flights for two trips that I hope I can do (airlines eliminating flight change fees were a great byproduct of the pandemic).
I have never felt more in control and conscious of my spending than over the past year in almost total isolation. Anxiety arises when I realize how easy it can be to lose my grip as we all get back to normal.
2 things I do to avoid a spending tsunami
In my experience, there are two types of social spending. One is mindless spending, which often happens when we are distracted in a group (“let’s take another round!”). The other feels compelled to buy something at the same time as the group, whether it’s a dinner party or a bachelorette party. Both mean you’re spending more than you planned and can easily distract you from your higher financial goals.
My antidote to social spending is twofold: maintain my list of values and increase my cash reserves.
My list of values is made up of things that improve my life – good mental and physical health, quality time with my family and closest friends, and delicious food, for example. I use this list as a rubric to decide if an item or experience is worth the cost. I think everyone should have one, pandemic or not.
I also direct some of my discretionary income into designated savings compartments for travel and other expenses that I will likely splurge on next summer. I know I am fortunate to have money to spend right now, when much of the country is still struggling. That’s one of the reasons I like to be intentional about it.
Most of the time, the value list works to keep me on track. And when it doesn’t, that’s what the cash reserves are for.
Tanza Loudenback, CFP®, is the Personal Finance Correspondent at Business Insider. She writes most frequently on savings, retirement planning, taxes, debt management, and wealth building strategies. Got a question about money for Tanza? Fill out this anonymous form.