This article is reprinted with permission from NerdWallet. When the pandemic shut down the world around her, Ashli Smith, an Atlanta resident and mother of a newborn, says she set up automatic payment of her recurring bills to help her stay organized and avoid late payments. “With everything that happens, besides being a mom, I don’t want to forget to pay someone or something,” she says.
While the pandemic caused incredible financial stress and uncertainty, it also led many consumers like Smith to form new financial habits worth maintaining, such as saving more and spending less. A NerdWallet survey found that the majority of people who formed new financial habits plan to continue with them through 2021. Here are five habits to consider following even as life begins to get back to normal: 1. Spend less, save more For many Americans, spending less amid the COVID-19 pandemic came naturally due to lost income or fewer spending options after restaurants and travel largely closed. The NerdWallet survey found that among those who said they acquired new financial habits during the pandemic they plan to carry out in 2021, 58% said they were cutting spending on “wants” and 36% said they were cutting spending on “needs”. “” If your job was eliminated or your salary was cut, then you’ve probably cut your expenses and got used to a lower monthly budget, “says Eric Simonson, certified financial planner and owner of the Minneapolis firm Abundo Wealth.” So soon as that income comes back, it would be an amazing opportunity to keep expenses the same but save all that new income. “Natalie Slagle, founding partner of Fyooz Financial Planning and CFP based in Rochester, Minnesota, says,” For those who were laid off laid off, the number one priority is to replenish savings. “For those who have become used to spending less, he says,” we encourage you to keep up that habit so your cash flow can be used to build your emergency fund at a higher rate of what was possible before the pandemic. “That way, it is easier to handle the next crisis, be it a loss of income or an unexpected expense, without going into more debt. Stick to a Budget In the NerdWallet survey, 39% of those who adopted new habits that they plan to do in 2021 said one of those habits was sticking to a budget. “Many people have looked at their budget and spending during [the pandemic], often for the first time, ”says Simonson. “It is important to continue with this post-pandemic, since maintaining a budget is part of a healthy financial plan.” Many people turned to budgeting to regain the sense of control that the pandemic took away from them, he adds. “The financial habits that you have been forced to learn and adopt have the power to create huge, positive and lasting change if you stick with them,” adds Simonson. Sticking with the budget makes it easier to generate long-term savings and avoid debt, for example. Minimizing travel spending Among those surveyed, 40% said that one of the new habits they plan to continue in 2021 was cutting travel spending. See: The Caribbean on a budget: How to get away after vaccination “One of the reasons we saw that our clients enjoyed lower expenses [during the pandemic] it’s because they didn’t go on vacation, ”says Slagle. “That not only reduced expenses, but they also have unused flight coupons and travel miles to spend.” Read: 8 Tips for Maximizing Your Credit Card Rewards As travel starts to start over, Slagle says he’s helping customers plan to use some of those savings and credits on their next trip to avoid spending the rest. Earn Extra Income According to the study, among those who developed new financial habits, just over a quarter said they took an extra job or an extra job to earn money. Kevin Mahoney, a CFP and founder of Illumint, a financial planning firm for millennials based in Washington, DC, says that earning extra income can help provide financial stability in times of uncertainty, so he encourages his clients to consider it. . Supplemental income mimics an emergency savings fund. People who can consistently earn their own income are better prepared to withstand financial volatility, ”he says. Read Next: 7 Things You Really Shouldn’t Buy With That $ 1,4005 Stimulus Check. Use automatic payment for bills Turning to Smith, who tweets about personal finances from control @badgirlfinances, says he plans to continue using automatic payment for bills, even after the pandemic is long overdue. In some cases, automatic payment also comes with a small discount. “It helps me stay organized because I know that on a certain date, money has to come out to pay the bills,” she says. More from NerdWallet Kimberly Palmer writes for NerdWallet. Email: firstname.lastname@example.org. Twitter: @kimberlypalmer.