The coronavirus pandemic has shifted nearly every aspect of how we live, from how we spend our time to how we spend our money. We’ve spent more on some things, less on others and maybe rethought our financial priorities.
As we hit the one-year mark of living with this new reality, take a look at some of the major ways we’ve had to adjust financially due to the pandemic.
We've Stopped Spending on Shopping and Recreation
An analysis by Qapital of Americans’ top financial priorities in 2020 versus 2021 found that both shopping and recreational spending dropped out of the top 10 from one year to the next. Last year, these categories ranked as No. 4 and No. 9, respectively.
Americans have also spent less on commuting, dining out and entertainment outside the home.
We've Spent Less on Travel
“People certainly are spending less on travel,” said Derek Notman, CFP, founder of Intrepid Wealth Partners.
However, he believes these savings will be short-lived.
“I suspect they are saving this money to spend and splurge on a larger trip as the world opens back up,” Nortman said.
We've Spent More on Our Homes
“There has been an increase in home spending — renovations, landscaping, etc. — since so many people are at home,” Nortman said.
For homeowners, this spending might actually pay off in the long-run. Nortman notes that some home improvements can lead to more equity, “but this is not always the case,” he added.
And We've Spent More on Entertaining Ourselves While at Home
Although concerts and sports games have largely been off the table, Americans have spent more on entertainment inside the home, including streaming services and takeout. And while restaurant spending is down, grocery spending has been up.
“One interesting aspect of the pandemic is that many of our clients’ aggregate spending has not decreased — it has simply shifted,” said Sam Brownell, CFA, founder of Stratus Wealth Advisors.
We've Invested in Real Estate
“During the summer months, many customers utilized unused vacation expenses and invested elsewhere, particularly in real estate,” said Robert Barnes, president and CEO at IBC Bank-Austin. “Some took advantage of low interest rates and purchased a new home.”
This trend seems to be continuing into the new year. The Qapital survey found that saving for a down payment is now the No. 10 top financial priority for Americans, and it didn’t even make the top 10 ranking in 2020.
We've Realized How Important It Is To Have Emergency Savings
Many people experienced job loss or decreased pay as a result of the pandemic, which highlighted the importance of having an emergency fund.
“For those who found themselves without adequate savings last year, there was a realization that saving was critical to avoid stress in the future,” Barnes said. “This led to many of our customers opening savings accounts and committing to saving regularly moving forward.”
We've Had To Be More Active Investors
“2020 showed the importance of active portfolio management,” said Jeremy Gove, a financial planner for Stonebridge Insurance and Wealth Management in Kearney, Nebraska. “Outflows of open-end funds in 2020 of $380 billion more than doubled the previous record set in 2019 of $180 billion. Many investors see the value of active management versus passive management they have been used to over the past 30 years. Market volatility and world-wide economic issues like COVID-19 have shown investors that a buy and hold strategy is not as productive as an actively managed strategy.”
Find Out: 15 Best Tax Tips for Investors
We've Had To Rethink Childcare
With daycares and schools closed amid initial shutdowns, parents had to rethink their childcare — and how to pay for it. Some decided to go without, balancing work with parenting duties — or in the cases of some mothers, leaving the workforce to fulfill these duties. Others got creative, opting for part-time childcare or inexpensive babysitters to cut costs. Depending on the situation, some parents actually saved on childcare costs, while others had to spend more to compensate for school closures.
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This article originally appeared on GOBankingRates.com: 8 Major Ways We’ve Had To Adjust Financially Due to the Pandemic