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The past six months have been eye-opening as people have reassessed priorities, formed closer bonds with friends and family, developed a fine-tuned appreciation for self-care, and held tighter to things that matter. “We’re more intentional about our spending,” offers Teresa Bailey, wealth strategist and director of development at Waddell and Associates, a wealth-strategy firm here in Nashville.
Once trapped in a pattern of continually moving through our days at a breakneck pace, diving headlong into our work and home lives, and spending our paychecks in a rapid-fire manner, the pandemic has provided us with a bit of quiet time to reflect on life. Generally speaking, it seems people are putting more emphasis on achieving meaningful moments rather than acquiring meaningless stuff.
It’s all about meaningful moments. COVID makes us re-think how we spend our money.
It may come as no surprise that consumer spending habits during COVID have altered; there’s an uptick in things like home improvement, technology, office supplies and even pet supplies. Out of necessity, sales are shifting dramatically to online retail, and we’re spending less time whipping out our credit cards for miscellaneous “stuff.” Instead, we’re keeping home improvement stores in business by updating and upgrading family rooms and perfecting our in-home offices. We’re investing in equipment to strengthen our communication with one another, and planning more simple and memorable trips that revolve around togetherness. “‘Emotional spending’ has become more prevalent than ‘responsive spending,'” explains Teresa, and she says that’s a step in the right direction. “Emotional spending gets a bad rap, and I’d like to see it have a positive flavor to it. Our money really should be spent in a way that brings us a positive emotion. It shouldn’t be just an emotional trigger.”
The idea is to move away from empty spending and put our money into the things that bring us true joy — connection and experiences over material collections and spontaneous spending. So, what qualifies as an empty spend? Often, it’s a financial decision made because we don’t have time to deal with something, so we throw money at it without taking the time to think it through and make a smarter purchase. “For some people, it might be only $5 a month,” Teresa explains. “For others, it can be thousands a month — especially if it’s empty food purchases, where you’re buying groceries every week that get thrown in the garbage, but you’re also going out to dinner because you don’t want to cook when you get home.”
Thankfully, there’s a shift toward more meaningful spending. Keeping up with the Joneses has taken a back seat to treasured family outings and outdoor adventures. Instead of buying another pair of shoes we don’t need, we’ve started to invest in projects such as building that back porch swing to enjoy more sunsets. While COVID has nurtured better spending habits, Teresa does acknowledge that these new habits look slightly different for everyone. Some might nurture their physical health by pouring more into fitness equipment, while others might nurture their souls by adopting dogs for companionship. Either way, the premise is the same: “That shift into the why and the meaning of the spend … We’re having a lot more conversations around that,” Teresa says.
So how can we ensure we put more emphasis on meaning? Teresa offers three useful suggestions. “Tip number one is to make a deal with yourself to review your expenses weekly,” Teresa advises. “Look at everything weekly so you can catch it before it gets out of hand.” Since impulse buying is a primary culprit of empty spending, Teresa’s second suggestion is to avoid buying anything online until you’ve thought about it for 24 hours. “The third thing is to have a plan for what you need to save long-term for your future goals, so your spending budget is really in line with the life that you want now and in the future,” Teresa adds. In other words, make sure you have a bigger-picture plan.
Perhaps the most important consideration is what the future of spending looks like. Once there’s a vaccine for COVID, and we can return to a lifestyle that more closely resembles the one we led before, will we spend our money differently? Some surges in online spending are likely permanent, but Teresa also predicts that leisure travel will skyrocket and emphasize the upward trend in meaningful spending. “I don’t have any data on this, but from observation and experience, people got way outside the box on their family vacations this year,” she says. “When you have multiple kids, and you’re really busy, you pick Disney or something that’s all-inclusive. You buy the airfare, show up, and plug into their vacation program. Since all of that went away this summer, families came together. They got an RV, got out an old-school atlas, and the kids got to see what a map looks like as they planned out different cities. I’ve talked to family after family that took road trips and did things they typically wouldn’t have experienced if we weren’t in this pandemic.”
For some, that form of reconnection is here to stay — glamping and Airstream trailers, here we come! “Maybe we get to keep that feeling,” Teresa says. “Maybe we’ll say, ‘I don’t need that Starbucks latte, because I really want to have a family vacation since it’s the last one where all the kids are together before college starts.’ We now have so much recording of every moment in our lives because of technology. We didn’t have that for big events in the past, even 9/11. I think there’s hope because technology might help us remember that many of the things we take for granted can be taken away at the drop of a hat. Money is a tool, and maybe we’ll use that more wisely.”
This article is sponsored by Waddell & Associates.