As a personal finance blogger and mentor, I’m always intrigued by investors’ and everyday people’s habits, especially students.
They have the most hilarious excuses on why something was a ‘great deal’!
Lately, I’ve been hearing many have massive regret over their abrupt pandemic purchases.
You’re not alone.
Over 64% of millennials alone have regrets about buying their first home during the pandemic! They decided they didn’t need a 6 car garage, hot tub, and water park after all.
A low-interest and mortgage rate environment made it enticing to borrow more to establish equity but even if it’s ‘on sale’ or ‘a great deal’ doesn’t mean you AREN’T spending. Borrowing is the most popular way Americans fund their lifestyles and grow their assets. Since majorty cannot even put down 20% on their first home, loans are a savor especially when a handful still tie up a majortity of their net-worth into their property.
Although we may have saved on commuting/transportation, events, leisure, travel, hospitality, and large experiential purchases, we tend to forget that we still had to spend our time somewhere which meant we just spent it in DIFFERENT ways. It hasn’t gotten easier to spend!
You may have stopped eating out, but did you order more in or buy fancy cooking equipment you’ve only used once since 2020?
Maybe you didn’t commute but did you buy a better car, nicer tech gadgets or a home away from home?
Pre-pandemic majority of us didn’t spend nearly as many hours in our homes as we do today. Over 80%+ of our waking hours is spent indoors! The more time spent at home increases the intrinsic value and utility of it which lead us to spend more sprucing it up with furniture, electronics, etc.
More time at home = higher electricity bill as well. I’m sure you used more toilet paper at home than in the office.
Everything counts!
Hidden Treasuries
It’s easy to believe we saved when we ‘did less’ and changed our lives but it’ll never be difficult to stop spending. Thankfully over 3/4ths of Americans report finding themsleves in a more stable financial position today than pre-pandemic due to monetary and fiscal stimulus measures, but the national savings rate came back down from a high of 30% to 7%. What a disappointment. Pent-up revenge spending, rock bottom interest-rates, and soaring asset prices enticed Americans all too much that they may be seeing their finances slip in no time especially with inflation kicking the bottom 90% the hardest.
Whether you had more time to increase your incomes sources, network, work for yourself, or invest in yourself or assets, take note of how your spending has really changed. You may be surprised!
Don’t sabotage your pandemic savings this time!
All appreciable assets and investments will pay for themselves if they truly work for you in the long run. If it won’t work for you in the future and appreciate, it’s a waste.
Pet Pleasers
Thankfully, one purchase people don’t have as much regret about, yet, is with their pandemic pets. I’m skeptical about this news. We will just have to wait and see until offices reopen in the distant future. My cousin’s dog can’t even deal with being home alone for a few minutes!
With too much attention, any pet adopted during the pandemic will most likely deal with isolation when a normal work day becomes the norm. The best way to combat this is through the CBT method (Cognitive Behavioral Therapy). More exposure, or in this case, less exposure and time away from home in increments will train your pet to become more comfortable alone and not confused.
Close to 1 in 5 households acquired a cat or dog since the start of the pandemic. I’m assuming for comfort and support, something we all needed. Yet this purchase sure wasn’t for free but well worth it if you have the time, energy, and flexibility. This number makes up approx 23 million American households.
A few weeks ago the most popular pet names of 2021 came out and they truly reflect the times!
Hear this,
According to USA Today, “Fauci was one of the most popular pet names of 2021 — shooting up 270% from 2020. The pet name Covid also vaulted 35%, and dogs named Zoom were up 443% to commemorate a work-from-home life. Dogs named Zoom deserve extra kudos considering bosses may not know if a worker is frustrated with their computer or pooch on a given day. Siri and Google also were technology-inspired pet names on the rise.“
Curious, has anyone experienced regret from their pandemic purchases?
If you have severe regret, acknowledge it, and understand you cannot change the past or the future, only the present so focus on repairing it instead.
Nothing in this world is for free. Somethign that looks too good to be true for example a 2 bedroom condo in NYC for half a million with a balcony and ammenities better not be purchased via Zillow. There has to be something wrong.
How you deal with today will help you plan for tomorrow. Until the Fed starts selling bonds in increments and pushes out their rate hikes next year, inflation will still be at its peak in 40 years.
We cannot rely on prices to go down or wages to keep up anytime soon so control what you can by buying what you need for now not what looks fun in the moment. If you aren’t in dire constraints and have seen your net-worth skyrocket and are in the best financail position of your life, you know the drill: spend modestly and invest in appreciable assets. The same way that got you here. They are always worth it.