5 Covid Money-Saving Habits to Keep

The COVID-19 pandemic is undoubtedly an event Americans won’t soon forget. In what seemed like moments, the world around us changed. And we were forced to come to grips with the fact that “normal life” as we knew it wouldn’t quickly return. 

But the pandemic also forced us to change the way we spend and save our money. And while financial struggles have been all too common, Americans adopted some healthy financial habits in increasing numbers. 

These five habits — popularized out of necessity during the height of the pandemic — are worth keeping as we move ahead into brighter times: 

1. Supersize your emergency fund. 

Since the start of the pandemic, more than 70 million Americans have lost their jobs, been furloughed without pay, or been forced to close their business’ doors. Millions more — predominantly women — have left the workforce to care for children during school and childcare closures. 

Despite early hopes that these setbacks would be temporary, the effects continued to be felt beyond 2020. And those Americans with small or non-existent emergency funds have struggled. In the past, many financial experts encouraged families to save enough to cover three to six months of expenses. But many gurus are now extending their recommended timelines — sometimes up to 12 months or even more. 

Having experienced an enduring pandemic with sudden, catastrophic financial implications, many people now see the very real possibility of an extended financial crisis. So, it’s more important than ever to start building or beefing up an emergency fund that can sustain you: 

  1. Open a dedicated, high-interest savings account that you’ll use exclusively for your emergency fund. 

  1. Set up automatic transfers every payday from your regular savings account to your emergency fund. 

  1. Save all — or at least a sizable portion — of “extra” money like bonuses, tax refunds, and monetary gifts. 

  1. Don’t touch your emergency fund unless you’re facing a true financial crisis — like a job loss, emergency room visit, or a hole in your roof. 

2. Find creative, cheaper ways to have fun. 

Starting from the earliest days of the pandemic, most of Americans’ favorite forms of entertainment were shut down or limited in some way. Gone were the usual vacations, dinners out, concerts, dancing at nightclubs, evenings at the movies, and more. 

These changes to our usual types of fun and socialization led to two important consequences. First, people began saving the money they would have spent on entertainment — with more than half of households saving more than they had before the pandemic. Second, individuals and families alike began finding new — often less expensive — ways to enjoy themselves. 

The creativity of everyday people in making their own fun and the ingenuity of businesses in adapting to health restrictions have changed the way we entertain ourselves. Even beyond the pandemic’s end, you’ll have more options for saving money while enjoying your free time: 

  • Sign up for streaming services or rent a movie online instead of visiting the theater. 

  • Buy a ticket to a performance shown over livestream — like concerts, magic shows, and more — instead of dressing for the theater. 

  • Seek out free entertainment (in-person or virtual) offered through your local library or town instead of paying for your fun. 

  • Sign up for an inexpensive, live, online class — like a paint-and-sip session — instead of going to a studio. 

  • Check out free courses and trial memberships on sites like Coursera, Udemy, and Skillshare. 

  • Plan a virtual get-together with family and friends instead of dropping your cash on a big night out. 

  • Rent an R.V. or try out an out-of-the-way Airbnb instead of springing for a costly vacation. 

3. Re-examine your financial relationship with food. 

Your family’s food costs likely make up a significant chunk of your budget. The USDA reports that nearly 10% of the average American’s disposable income is spent on food alone. 

But 2020 brought some big changes with how households bought that food. And some of those habits — made more popular out of necessity during the early months of the pandemic — are worth keeping: 

  • Make more meals at home. Limited restaurant availability and occasional boredom prompted many more Americans to whip up their own meals or craft a loaf of sourdough. And making food at home will most often cost you less than eating at a restaurant. 

  • Grow your own. With supply chain problems during 2020, adults and children alike started gardens to provide fresh produce. Even a small windowsill garden going forward could save you money while offering fresh ingredients. 

  • Consider a meal kit delivery service. These kits — offered through services like HelloFresh or Blue Apron — almost always cost you more than a trip to the grocery store. But, if you’re in the mood for a restaurant-quality meal, you can make your own at home for less than you’d likely spend while dining out. 

  • Buy in bulk. Supply shortages and competition for grocery pick-up and delivery prompted many Americans to start stocking up on essentials. Moving ahead, consider purchasing your most-used, non-perishables in bulk to save on your per-unit costs. 

4. Consider usage-based auto insurance. 

During the pandemic, remote working surged and restrictions on travel kept many people close to home. The shift was so significant that several auto insurance companies issued premium refunds across the board to their insureds. 

At the same time, many insurance companies have begun offering usage-based insurance, which determines premiums based on your driving habits and the miles you put on your car. Even though pandemic lockdowns have ended, usage-based pricing could provide significant savings to some Americans: 

  • People who are still working from home instead of commuting 

  • People whose companies have moved toward virtual conference attendance in lieu of in-person meetings 

  • People who own a car that’s only occasionally driven 

5. Invest during the lows. 

March 2020 was notable for many things — the country-wide shutdowns, the scramble to limit the spread of the pandemic, and the near free-fall that gripped the stock market. Over a four-day period, the Dow Jones Industrial Average plummeted 6,400 points

But, despite the shocking drop, the crash provided investors with a unique opportunity — the ability to increase their market holdings at a discount. Since that time, the market has seen impressive gains for those who bought in during the low period. And industries that surged during the pandemic — like healthcare, consumer staples, and Amazon — performed well. 

Going forward, Americans should continue to view the stock market as an opportunity for growth — especially when a negative market event occurs. If your time horizon is large enough, you can actually capitalize on the market downturn by buying more shares at a lower price than usual. 

Fortunately, getting started in investing is easier than ever and can be done with as little as a few hundred dollars. Use your employer’s 401(k) plan or open an account of your own online in just minutes. Once you transfer funds into your new account, simply choose your investments. Choose from stocks, bonds, mutual funds, exchange-traded funds, and more

Americans will likely feel the financial impacts of the COVID-19 pandemic for years to come. But, by adopting some smart money habits, we can improve our savings and our sense of security so we’re ready to face what comes next, from a place of financial strength. 

The material presented here is for informational purposes only and does not represent specific financial advice to you or your circumstances personally.