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Is your budget ready to reopen?

This article reprinted with permission of NerdWallet.

The image of your car goes deep into the year 2021 and never glances through the rearview mirror. Vaccines, travel and normal hope are finally here.

With so much to look forward to in the future, not wanting to look back is understandable.

But going back to everyday life will be a transition. And from a financial standpoint, you’ll want to appreciate your past budgeting behavior to prepare for the normal days to come.

You can’t keep up with the money you have reduced on home entertainment and food delivery while increasing the amount you spend on indoor meals and live performances.

Review past and present spending

Last year’s spending was not the same as 2019. And 2021 won’t be the same as 2020 or 2019. But you’ll need this historical insights to inform your future spending, especially when you are Start reintroducing expenses that were once normal, like concerts. air tickets, air tickets and so on.

Some people’s spending dropped significantly in the last year (be it by necessity or by choice). But others face comparable costs, said Molly Laughter, certified financial planner and founder of Laughter Financial LLC in Dallas.

Remember the jungle gym where the kids could play in the backyard? Or Xbox for long nights playing video games? They can be great ways to keep you busy and comfortable at home, but for now you’ll need to find a way to balance these newer expenditures with your past spending on activities you did. hope to come back.

Since many of us take a close look at our finances now when we pay taxes, Laughter recommends using this opportunity to review year-end financial summaries from credit cards and your bank account.

Do not miss: Travel in 2021: Can we expect good deals or hotel and flight prices to skyrocket?

Increase the size of each type. How much money do you spend? Is it worth the money? Would you like to continue spending that much?

Play favorite

Since then COVID-19 Having become a part of our vocabulary, someone says life will never go back to normal. The laughter that predicts your future spending will be a “new normal”. Sure, you can recommend a dinner outing – and maybe even a trip – with a combination, but expect to keep paying for insulated life essentials like deliveries and activities at home.

According to Vid Ponnapalli, CFP and owner of Unique Financial Advisors based in Holmdel, New Jersey, “There will be a paradigm shift in relation to future budgeting versus pre-COVID budgeting. “

This new balance means you’ll need to play your favorite games with your finances. After all, you can’t keep up with the money you’ve dropped on home entertainment and food delivery while increasing the amount you spend on indoor dining and live performances. It won’t all pocket-friendly. Choose the expenses that benefit you the most.

To make the necessary adjustments, Laughter suggests looking at the big picture. Don’t get too caught up in specific line items. (For example, if you’re spending 25% less on grocery orders, you don’t need to pass that exact amount over to dinners out.)

Instead, when your needs and savings are taken into account, set a number of dollars you can afford to spend monthly on discretionary expenses, then spend on whatever you want. want. You can never re-add some of the things that you used to spend money on.

As Ponnapalli says, we’ve all figured it out ways to spend less money and still happy. Spending thousands of dollars on concert tickets might no longer be worth it when you compare it to watching a (much cheaper) live stream at home.

Plan for future goals

Life has not returned to normal yet. But for many Americans, vaccination prospects are only weeks or months away. Use the time from now until then to prepare for what is to come.

Also see: The Pfizer CEO said people will need COVID-19 vaccination every year

Laughter to speak think of it as an announcement. “Vaccines are not being produced as quickly as we would like them to be,” she said. “So start your watch.” Start setting aside a set amount of money each month to accomplish your goals when you have said and done it.

For example, if you want to travel again on a certain date, use the next few months to transfer money to a designated savings account. If your student loan payments are on hold, plan on how you will strategically spend those additional funds during that time. And be prepared for that extra bill when it’s reintroduced.

Whatever financial decision you make, remember, whether we are in a pandemic or not, the fundamentals of finance are not lost. Divide your money between what you need, what you want, and what you save.

Continue reading: Many airlines fill the middle seat – in direct contrast to CDC’s advice on reducing COVID-19 exposure

Your allocation may change, but “the name of the game is the same as before – budgeting, budgeting, budgeting,” says Ponnapalli.

These are better days and a better budget is ahead.

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Courtney Jespersen writes for NerdWallet. Email: [email protected] Twitter: @CourtneyNerd.



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