As the pandemic brought the world around her to a standstill, Ashli Smith, an Atlanta-based mother of a newborn, said she set up autopay for her recurring bills to help her stay organized and avoid late payments. “When everything is going well and I’m a mother, I don’t want to forget to pay someone or something,” she says.
While the pandemic caused incredible financial stress and uncertainty, it also resulted in many consumers like Smith developing new financial habits that were worth maintaining, including saving more and spending less. A NerdWallet poll found that most people who developed new financial habits plan to continue them through 2021.
Here are five habits to remember when life returns to normal:
1. Spend less, save more
For many Americans, less money in the midst of that Covid-19 pandemic came largely closed after restaurants and travel, of course, due to loss of income or fewer spending options. NerdWallet’s survey found that 58% of those who said they had adopted new financial habits during the pandemic they plan to carry out by 2021 reduced spending on “needs” and 36% reduced spending on “needs”. ”
“If your job was cut or your salary was cut, you probably cut your expenses and got used to a lower monthly budget,” said Eric Simonson, certified financial planner and owner of Minneapolis firm Abundo Wealth. “Once that income comes back, it would be an amazing opportunity to keep the expenses the same but save all that new income.”
Natalie Slagle, founding partner of Fyooz Financial Planning and CFP based in Rochester, Minnesota, says, “For those who have been on leave or laid off, the # 1 priority is replenishing savings.” For those who have gotten used to it to spend less, she says, “We encourage them to keep this habit so their cash flow can be used to build their habits Emergency fund possible at a higher rate than before the pandemic. “That way, it will be easier to face the next crisis, whether it is a loss of income or unexpected expenses, without taking on more debt.
2. Stick to a budget
In the NerdWallet survey, 39% of those who started adopting new habits that they plan to adopt by 2021 said it was one of those habits Be tied to a budget.
“So many people were looking at their budget and spending in the meantime [the pandemic]often for the first time, ”says Simonson. “It’s important to hold on to this post-pandemic, as keeping a budget is part of a healthy financial plan.”
Many people turned to the budget to regain a sense of control that the pandemic had taken from them, he adds. “The financial habits that you have had to learn and practice have the power to make big, positive, and lasting change happen if you stick with them,” adds Simonson. For example, continuing the budget makes it easier to achieve long-term savings and avoid debt.
3. Minimize travel costs
40% of respondents said one of the new habits they want to continue in 2021 is cutting travel expenses.
“One reason we’ve seen our customers have lower costs [during the pandemic] That’s because they didn’t take their planned vacation, ”says Slagle. “Not only did that cut costs, but they also have flight vouchers and unused travel miles to spend.”
When the trip begins again, Slagle says she is helping customers use some of those savings and credits on their next trip to avoid over-spending.
4. Earn extra income
Based on the study, just over a quarter of those who developed new financial habits said they took advantage of a sideline or extra work to make money. Kevin Mahoney – CFP and founder of Illumint, a Washington, DC-based financial planning firm for millennials – says earning an extra income can help maintain financial stability during uncertain times, which is why he encourages clients to think about it.
“Extra income mimics an emergency savings fund. People who can consistently generate their own income are better prepared for financial volatility, ”he says.
5. Use Autopay for bills
As for Smith, who tweets about personal finance from the @badgirlfinances handle, she says she wants to continue using autopay for bills even after the pandemic is long over. In some cases, Autopay also comes with a small discount.
“It helps me stay organized because I know that by a certain date, money has to come out to pay the bills,” she says.
This article was written by NerdWallet and originally published by The Associated Press.