What You Should Do Before Splurging on Post-Pandemic Travel and Other Spending

What You Should Do Before Splurging on Post-Pandemic Travel and Other Spending


Illustration for article titled What You Should Do Before Splurging on Post-Pandemic Travel and Other Spending

Photo: Rawpixel.com (Shutterstock)

While it’s easy to say “don’t spend too much” after the pandemic, the truth is that just under half of all Americans are going to treat themselves with travel or shopping, even if that means going into debt to do it, according to a recent creditcards.com report. With that in mind, here are some tips on how to contain that spending so that you don’t YOLO yourself into too much debt.

Reassess your finances before your shopping spree

Your personal financial situation has likely changed since the pandemic began, whether that’s from deferred student loan payments or the number of TV streaming subscriptions you might have accumulated. Simply listing your income and expenses (by month and by year) and writing down your financial goals can go a long way to help you minimize overspending.

After all, if your new spending priority is a couple thousand bucks on a trip, you might realize that’s more achievable if you cancel or cut back on other expenses that suddenly seem less important after the pandemic. This is why we recommend a subscription audit as part of your reassessment, as there might be some recurring expenses you’ve forgotten about (like that Peloton app subscription you never use, for example).

And if you don’t maintain a budget? This Lifehacker post will walk you through it.

Make sure your emergency fund is taken care of first

An emergency fund is a stash of money that will cover unexpected expenses related to a job loss or healthcare costs. Ideally, you want at least three months (if not six) of your recurring expenses covered by an emergency fund. If that fund has been depleted by the pandemic, consider replenishing that fund before planning any big discretionary expense, if you can.

Consider spending on self-improvement

There’s a distinction between “treating yourself” and celebrating a return to normalcy. For example, I was toying with the idea of buying a new gaming laptop as a “reward” for spending less during the pandemic. But then I realized what was really motivating my urge to spend was the need to break up my routine, and that I actually preferred to socialize more and go out into the non-digital world and actually do things. As a result, I signed up for a rec sports league instead.

Of course, everyone has different priorities, but consider splurging on self-improvement—classes, book clubs, signing up for a personal trainer—as these activities might be both cheaper and more rewarding long-term compared to travel or a shopping spree.

Track your post-pandemic spending

Similar to food tracking apps, sometimes keeping an ongoing tally of your spending can help you identify bad habits, like making regrettable online purchases made out of boredom because it’s 10 p.m. and you’ve had a couple glasses of wine.

Ideally, your monthly budget should include some room for discretionary spending. By tracking your daily spending, you might realize that you’re spending more than is budgeted, allowing you to adjust accordingly. Also, consider the 24-hour rule for discretionary spending: If you really want something, waiting a day can’t hurt.

Plan around inflated travel prices 

As we’ve discussed before, supply issues and increased demand has raised prices on many items, particularly those related to travel (cars, hotels, gas, and restaurants). Before you commit to a big trip, create a shortlist of destinations and compare the estimated costs first, as the price differences might surprise you.

As an example, rental cars booked at airports are going for double or triple what they used to. In that case, flexibility is best: You’ll want to plan your trip around the rental car (and where you’ll pick it up) to ensure the cheapest price, or perhaps even avoid rental cars altogether. This applies to hotels and airfare, too. A little planning will go a long way.

 



Source

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top