As more and more Americans begin traveling, and visiting restaurants, salons and other shops that were previously closed during the pandemic, the desire to spend is more tempting than ever.
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According to the MassMutual Consumer Spending & Saving Index, Americans are now spending an average of $765 more a month than they were at this time last year when much of the country was in lockdown.
"Now, with the ability to travel and go out more freely, [people are] making big plans and possibly spending more than they normally would to 'make up for lost time,' as they see it," Farnoosh Torabi, editor-at-large of CNET Personal Finance, told Good Morning America. "There may be a tendency to go overboard."
In addition, those that struggled financially during the last 18 months may find it even harder making ends meet in the face of inflation.
"Prices on everything from coffee to cars have gone up in recent months,” Torabi added. “There's definitely some sticker shock going on."
To help consumers navigate the next stage of the pandemic, Torabi offered up several tips for managing finances.
Keep calm as you reassess post-pandemic goals
"Making financial decisions in a highly emotional state is never wise. So take time to reflect and reevaluate your goals and values, which may have changed dramatically over the course of the pandemic," Torabi said. "Get clear on any lifestyle changes you may want to make, the relationship or career shifts you may newly desire, and from here, start to design a new financial roadmap for yourself that's aligned with all of that."
Save, save, save!
Torabi stressed the importance of using your money to build savings over paying off debt.
“It's important to dedicate as much of your paycheck as possible -- and quickly -- towards having a minimum 6 months of your bare-bones living expenses reserved in a savings account,” she shared.
"Pay the minimums on your debts every month, of course. But contribute any extra income towards your emergency savings first before any other financial goal," she added. "Start small if you have to, but just start."
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Buy what you need, not what you want
The financial expert strongly suggests people spend on meaningful things over unfulfilling items such as pricey footwear.
“We learned again what matters most like our affording health care, investing in a support system in your life and investing in experiences that create memories,” she continued, “as opposed to shiny objects that lose their luster after a while."
Don’t try to keeping up with the Joneses
“Social media can be a costly influence, so if you find yourself triggered to spend because of ads or friends' experiences on Instagram, step away from the app for a while,” Torabi said. “And take time to get clear on your personal goals."
Make a plan and stick to it
Whether budgeting for a trip, eating dinner out or having $7 frappuccinos, figure out a plan that includes trade-offs to make sure you aren’t out of cash at the end of the month.
"If there's an experience you really want to afford, then create a plan and start saving now. Reverse-engineer it,” Torabi urged. “If you start saving a little today, you have a far better chance of achieving your goal in good time."
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