What We Can Learn From the Spending We DIDN'T Do in Quarantine
Our lives have been radically changed by COVID, and this was especially true when we were locked down and couldn’t leave our homes. For the first time in many people’s lives, if we didn’t have essential jobs, we were basically imprisoned, and most businesses were closed. To the detriment of economies all around the world, people had far fewer options to spend money.
I’ve always been a big proponent of tracking your spending every day. I use a free spending tracker app called, unsurprisingly, “Spending Tracker”, and it takes me about 30 seconds each day. It gives me access to tons of great information and allows me to know exactly where my money is going. I started to notice that during lockdown, I had a new phenomenon happening, I was having “no spend days” where I didn’t spend a single dirham. I was cooking for myself, not driving anywhere as it wasn’t allowed, and unable to shop like I was used to. I’ve always been naturally inclined towards saving, so as soon as I saw this in my data, I was pretty excited, and I tried to have as many “no spend days” as possible.
And it wasn’t just me who wasn’t spending. In my home country, the USA, their normal savings rate is around 4%, which is terrible, but the topic for another article. But during lockdown, their savings rate shot up to over 30% according to the U.S. Bureau of Economic Analysis. I couldn’t find similar data for the UAE, but I imagine it was similar, if not even more extreme, as there are many people here that come from communities where saving is a more ingrained habit.
So, obviously people were spending a lot less money, and I think there are lessons to be drawn from that which could benefit our financial lives even after COVID is a distant memory. One of the key ideas of Financial Independence is that spending more money doesn’t automatically lead to more happiness, and that it’s important to only spend money on the things that really bring you what you need, not just momentary bursts of pleasure during “retail therapy” that quickly fade and leave us wanting more. Could the things we didn’t spend money on during lockdown be things we could continue to NOT spend money on and be fine after lockdown was over? Could we really reform our spending habits and be able to save more money and reach our financial goals? I hope so, but only if we examine what we didn’t spend money on and think about how that changed us.
A few categories of spending that went way down were things like brunches, entertainment outside the house, clothes, travel, beauty treatments, and certain services like non-live-in maids. I’m sure that if you look at your own life, you can find the areas you weren’t spending money on as well.
Here are a few key questions to ask yourself to help use that information.
Was I able to get used to not spending money on that thing? After a couple of weeks, did I miss it?
Did I learn new skills or reconnect with old skills that allowed me to do things I would usually hire others to do for me?
Were there any things that I stopped doing that made my life better for their absence? If you had expensive habits that were harming your body, like a weekly bender or shisha, did you notice that cutting them out because you didn’t have access to them actually helped you?
There are many types of spending that don’t make our lives better. Sadly, we are usually so accustomed to those actions that we don’t even think about their effects or if they’re necessary. COVID and lockdown could be the opportunities we need to break out of some of our spending habits, but it takes a bit of self reflection. Don’t waste a crisis, use it to improve your life.
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