COVID-19 is Changing the Way We Approach Money

A lot has changed for us since the COVID-19 pandemic began. If we still have a job, many of us work remotely. We do not get to see our family and friends in person much. And when we do, we take social distancing measures like wearing masks and keeping 6 feet apart. We can’t congregate in big crowds at sporting events or live concerts. But with these big changes comes another kind of major change: changes to our financial life.

In this article, I will discuss how my finances have changed since the pandemic began. I now see some of these changes as positives that I should keep even after the pandemic. To cut down on your expenses and save money, these money lessons should serve you well during the pandemic and after it as well. But first, let’s take a look at the current state of our financial world.

Financial Insecurity during COVID-19

COVID-19 has changed our money habits. For example, April provided the largest drop in consumer spending since the government began tracking the metric in 1959.

That may come to you as no surprise. Many businesses deemed “inessential” closed down completely or could only operate at partial capacity. Restaurants, bars, tourism, movie theaters, and many retail outlets took a major hit.

As a result of the current climate, many people also lost their jobs. In the latest report from the Labor Department, people filed almost 1.5 million new unemployment claims. More than 1 million claims were filed for 14 weeks in a row.

Even as states opened back up, the financial situation for people and businesses remains precarious. And some states, like Florida and Texas, either stalled their reopening or have closed down again.

Amid everything going on in society right now, I decided to take a hard look at my own finances to see how my spending has changed. My analysis follows:

How I Spend Less Money Now

I’ve written in the past about how spending less money starts with a budget. Several reasons for this exist. In general, you need to analyze your spending habits to know where your money goes.

So today I sat down to analyze my budget to see how my spending has changed since the beginning of the pandemic. I found that my spending decreased on the whole by about 34% – a lot, indeed!

It does not surprise me that my spending decreased. What surprised? How much has my spending decreased? Of course, some of my expensive items did not change very much.

For example, although my landlord gave me a small discount on my rent, it still costs me more than any other expense. Nor did my utilities decrease – in fact, as I stay home so much more, my air conditioning runs all day long at a lower temperature, which drives up the cost of my electric bill.

The sources of my largest decreases include the following:

• Restaurants

• Bars and clubs

• Out-of-home entertainment (movies, concerts, etc.)

• Travel

• Retail shopping

But the funny thing remains: I don’t miss the things I spend less money on or even at all. In fact, I’ve come to an important realization: I plan to continue many of these cuts even after the end of the pandemic.

Financial Changes I’ll Keep after COVID-19

Over the last year and a half, I have developed some major new financial goals in my life. These goals include getting debt free, padding my emergency fund, investing more, and working towards financial freedom.

I admit these as lofty goals and will take much work. One thing that the coronavirus has taught me: I need to work more on cutting back.

As a result, some financial changes I plan to maintain even once life “goes back to normal” include the following. If you work on your finances to spend less money as well, I hope you find many of these helpful as well.

1. Eating at Home and Cooking More

I won’t lie. Eating out at restaurants has always been one of my great pleasures in life, and I do miss it quite a bit. Even as restaurants have opened to partial capacity in my city, I stay away from dining out.

And even with quite a bit of takeout and hefty tips for restaurant workers and delivery people, my restaurant expenses – including takeout and delivery – have dropped by a whopping 55% since the pandemic.

This not only saves me lots of money but eating at home can be much healthier, too! I cook more, I know what I put into my body, and I measure my portions carefully. I call this a health-finance win-win.

Cooking also presents a great opportunity to practice mindfulness, a life skill that comes in handy during turbulent times in the world. I can focus intently on the process of cooking as well as the process of eating – which makes the food taste even better.

Of course, when I feel safe doing so I will return to restaurants; there’s no reason to completely deprive myself. But I will make it a point to cook and eat most of my meals at home instead of at restaurants rather than the other way around.

2. Drinking Less

Just as I do not spend time in restaurants, I also do not spend time in bars. And while I miss those too, it pleases me that I consume much less alcohol.

Don’t get me wrong, I still drink. My local liquor store delivers and does touchless pick-up service as well. I haven’t forsaken my favorite Kentucky bourbon or my semi-dry Spanish rosé.

But drinking at home costs far less because you do not pay the kind of markup you pay when you order alcohol with dinner. And while I may have a glass of wine while socializing with friends on Zoom, this differs from spending four hours at the local Irish bar – and paying for drinks the whole time.

Like with restaurants, I do not plan to stay out of bars for the rest of my life. Rather, I have learned to accept consuming far less alcohol than I did before. It’s healthier, I feel better, and I spend much less money. Another win-win.

3. Buying Fewer Clothes

I tend to go through cycles with buying clothes. When I feel good in my body, I want to purchase an entire department store’s high fashion lines. When I feel overweight or unhealthy, I tend to prefer to hide in the drabbest clothing possible.

Before the virus, I also wore different clothes for all kinds of different settings: work clothes, relaxation clothes, gym clothes, casual dining out clothes, and fancy dining out clothes.

You can see how all that money adds up. But since the pandemic has started, I find that I barely buy any clothes. And I wear a very small percentage of what I actually own.

This has saved me a lot of money. And I now realize that I don’t need such a large wardrobe. I won’t pare down to a completely minimalist, capsule wardrobe, but I do plan to start sticking to staples and essentials as much as possible.

By buying higher quality, classic-looking clothing that I can wear basically anywhere, I find that my wardrobe looks and feels good in a variety of different settings. Zoom calls with work and with friends can appear similar fashion-wise – and my wardrobe seems much more versatile this way, too. I look great, I feel great, and I spend far less on clothing.

4. Less (and Cheaper) Entertainment

I love music – no matter what I do, I usually do it to the soothing sounds of Dave Matthews Band, Paul van Dyk, Kendrick Lamar, or a myriad of other amazing recording artists.

I try not to think about the amount of money I spend on live music and concerts. Hint: a lot. Of course, since the pandemic started, I have not gone to see any live music.

And you know what? I survive. And I save a ton of money. Similar to the other categories, I will not deprive myself forever. I will attend some concerts in the future.

But in the future, I will attend far fewer live shows. I miss the occasional concert, but I don’t miss going to concerts every week or every few weeks. Attending that many shows do not add that much to my life compared with the amount of money I spend on music.

And when I do go to concerts, I’ll choose to spend a lot more concert tickets on inexpensive local artists rather than high-priced arena rock artists. Support local art and music, I say!

5. Exercising at Home

Many of us enjoyed the luxury of a fancy gym that we can no longer enjoy. Of course, who doesn’t want to feel pampered as they work hard to burn those calories and build those muscles?

But at the end of the day, working out doesn’t need to be luxurious. It just needs to get the job done. And most of us have discovered that we can burn all those calories either right in our own homes or by exercising in that free gym known as the great outdoors.

Now, many of us still splurge on luxurious workout options. For example, we may buy fancy, high-end fashion athletic apparel. My brother owns a Peloton, a substantial in-home workout investment for sure.

But many of us also learned that we don’t need to spend that kind of money to get a good workout. We run outside. We use exercise videos on YouTube.

Once the pandemic blows over, I do not plan to re-join a fancy, expensive gym. I have all the exercise equipment I need right in my own home and outside, and it barely costs me anything. It saves me a lot of money each month – and can do so for you, too.

Concluding Thoughts on COVID-19 Money Changes

The overall point: a lot of the things we have done that have saved us money since the pandemic started we should keep doing after the pandemic has ended if we really want to cut our expenses down.

As I strive for my big financial goals, cutting expenses and keeping them low has been important to me. And I realize now how much money I wasted on things before we all had to start sheltering in place that I really have no interest in continuing to spend my hard-earned cash on.

I recommend that you evaluate some of the lifestyle changes you’ve made since the coronavirus started and how they have impacted your bank account. Have you saved a lot of money? If so, do you really miss the things you’re saving on?

I have a feeling that, like me, you won’t feel a pressing need to go back to your old pre-pandemic lifestyle and money ways once things start to return to normal. And while the coronavirus has been a devastating blow to our economy, it presents a financial silver lining that I think we can all take heart about.

We would love to hear your stories about how you are saving money during the pandemic and which behaviors you will keep when things go back to normal. Please share your experiences in the comments section below.