Prioritizing your spending to avert disaster during COVID
The last few weeks, I’ve been spending a lot of time in the malls here in Dubai. I’ve undertaken a walking challenge that started at 15,000 steps a day, and increased it to 25,000 steps this past week and next. As the current temperature in Dubai is “the surface of the sun”, it seemed reasonable to do the walking in malls, where it’s air conditioned and, mostly, civilized. I’ve noticed that many other people are also going to the malls. Tons of them are shopping; it’s not unusual to see people carrying several bags of stuff with them. This makes sense, it’s a mall, and I’m sure that the stores are very happy to have customers back.
But this conspicuous consumption also has me curious and a bit worried. Are these people who are laden with fancy bags full of shiny purchases making good economic decisions? Or are they spending their way to ruin in an economy that is still reeling from Covid and quarantine?
During an uncertain economic situation like we are in now, it is more important than ever to prioritize your spending towards your needs, and not your wants. This can definitely feel like onerous belt tightening, especially when shopping is such a reliable source of excitement, temporary happiness, and a return to normalcy that many of us are craving. But, I promise that your future self will thank your current restraint, when you make it out the other side of this situation without serious hardship.
So, if frivolous spending is to be discouraged, where exactly should your money be directed? To your needs, specifically five key areas.
Housing - Make sure you have enough to pay your rent or mortgage. This may be a great time to move, as rents are dropping, and your cost of living could decrease massively by changing your housing. It’s a great time to downsize as well, as this can further reduce this expense. Also, think of how small your electric and water bills would be if you had a smaller place!
Utilities - Speaking of electricity and water (and internet), make sure you can pay those bills. Now is a great time to try to reduce those expenses as well. Let your air conditioning sit at a higher temperature, especially when you leave the house. Make sure there are no leaks in your water system allowing precious and expensive water to be wasted without your knowledge. See if you can reduce your cell phone bill by using less data when you’re not on wifi.
School fees - Schools will hopefully be fully open at the end of August, and your kids need a place to learn and socialize. Make sure there’s money for them to attend! Schools right now are scrambling for students, so it might be a good time to negotiate lower fees or a new school.
Food - You have to eat, right? But can you eat less expensive products? Can you batch cook large portions and eat them over several days? Make sure you are eating things that help your immune system like fruit and veggies. But don’t forget rice, beans, lentils, oats, and other staples that are shelf stable and are also really good for you!
Transportation - Can you pay your car loan if you get laid off? Can you switch to a cheaper car? Can your family reduce from two cars to one with a little creativity? Either way, you need to get to work and other things, so transportation needs to be considered.
Beyond these 5 categories, and within these categories, you need to cut back on your spending and prioritize your needs over your wants. And remember, this is only temporary. We will overcome this, and then we can go back to a more normal life. But for now, be safe and save.
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