For the introverted and the frugal, the pandemic has offered a welcome reprieve from the social pressures to go out and spend money. Although I am grateful for the vaccine, easing travel restrictions and the renewed freedom to safely gather with friends and family, I’ll admit that the return to social life at first was a bit of a shock, not in the least to my wallet.
During the pandemic, the savings rate soared. But after hitting a 45-year high in April 2020, the rate began to decline in 2021 and will likely settle near its historic average in 2022, says Elizabeth Renter, data analyst for NerdWallet.com, a consumer website.
If you find yourself ready to save a little less and spend a little more, consider what’s influencing your buying decisions.
The power of social media. Nearly three-fourths of millennials say social media impacts their buying choices, according to a recent CreditCards.com survey. Generation Z is not far behind, with 66% admitting that their buying decisions are influenced by social media. “It’s a bit of the ‘keeping up with the Joneses’ mentality—we want to put our best foot forward to our friends and family,” says Ted Rossman, senior industry analyst for CreditCards.com. Ultimately, our social media feeds end up inundating us with highlight reels from the lives of our friends and family members, which can make it seem like everyone is on vacation all the time, eating well, dressing fashionably and spending liberally.
Social media may also contribute to our willingness to go into debt, Rossman says. As coronavirus pandemic restrictions ease, 44% of U.S. adults say they will take on debt to “treat themselves,” according to another recent CreditCards.com poll.
Even if you’re still working at home, it’s not too early to start thinking about how going back to the office will affect your budget. Otherwise, you could see a sharp increase in spending on your wardrobe, commuting and eating out. Make sure you’re taking full advantage of any benefits your company offers to help cover commuting costs, such as subsidies for public transportation, free or discounted parking, or benefits for employees who walk or bike to work.
There is more than one line of defense to resist the pressures to spend. I’ve found that setting spending targets and tracking my finances with budgeting apps are convenient ways to stay on top of my cash flow. Mint, which is free and available in most mobile-app stores, links with your credit and …….