The COVID-19 pandemic certainly did its damage, but believe it or not, there’s financial beauty to be found in the destruction. While businesses closed their doors and local municipalities enforced stay-at-home orders, many of us discovered a new world of money-saving habits that still protects wallets as the nation transitions into its post-pandemic economy.
Some of these benefits include padding retirement savings, managing your online shopping impulses, and even finding car insurance on a car you rarely drive. what is a low mileage car insurance policy? Read on to learn how you can continue (or start) to spend better in our post-pandemic world.
#1 – Padding Your Retirement Savings
For those with excess savings left over from either government stimulus money or working from home during the pandemic, now is the time to make that extra cash start working for you. Many don’t realize how retirement savings and other investment accounts actually work, and it’s likely that your own retirement savings took a hit during the pandemic as markets tanked.
But no matter how the pandemic affected your bank accounts, it’s never a bad idea to get into the habit of contributing a little more to your retirement savings. Sandy Adams, partner at the Center for Financial Planning, says that now is the right time to start making catch-up contributions for those with excess money left over from the pandemic.
Doing so not only helps to recoup lost savings over time as the markets recover but also builds the healthy financial habit of investing.
Build out Your Emergency Fund
If you don’t have the excess funds lying around to “set and forget” into your retirement savings, consider adding anything you do have left over into an emergency fund, which is just one of many financial best practices. Emergency funds help you manage unexpected expenses and emergencies as they arise.
An emergency fund can simply be your savings account (not your retirement savings) to which you contribute a small percentage of your paycheck or a separate savings account entirely that you contribute to on your own schedule, say, quarterly or annually.
And, if you feel like you lack the willpower needed to manually transfer money into your emergency fund accounts, some banks, brokerages, and mutual fund companies offer an auto-save feature that takes care of that for you.
Self-Educate on the Financial Markets
Did you know that certain mutual funds exist solely to help investors retire by a certain date? These funds are heavily diversified, low-risk, high-return investment vehicles managed by professionals. All you have to do is contribute the capital and watch it grow.
Granted, because of their conservative investing nature, these funds definitely won’t make you rich overnight. Take the American Funds 2050 Target Date Retirement Fund, for instance. However, they can be great additions to your investment portfolio.
Take a look at what else is out there. Carry over some of the time-management strategies you probably learned while in quarantine into your professional life to self-educate on the financial markets and how they can make your money start working for you.
#2 – Managing Your Online Shopping Habits
We’re all guilty of loving convenience a little too much. The pandemic thrust online shopping and digital spending into the limelight, and it doesn’t look like online shopping is going away any time soon. As if it weren’t already booming before the pandemic, online shopping is drawing even more clicks and revenues today than it was before.
You can probably imagine how online shopping, as a result, can really drain your bank account and even fuel an addiction to buying things online. All you have to do is click a couple of times and the goods magically appear on your doorstep a couple of days later (if you didn’t pay extra for overnight shipping).
Here are a few tactics you can deploy to help you manage your online shopping habits:
- Stop and think. Before you buy anything, get into the habit of asking yourself, “Do I really need this?” If the honest answer is yes, great. If not, take a look at your finances and truthfully discern whether this purchase is worth it.
- Keep track of every purchase. If justifying every online purchase is something you excel at, make sure you’re at least keeping accurate track of the money leaving your account. This way, you can look back on your financial statements at the end of each month and really get a feel for how much you spent.
- Remove online shopping apps. If all else fails, maybe it’s time for a harmless break. Removing all online shopping apps from your digital devices helps to jumpstart better money-saving habits. And yes, Uber Eats, DoorDash, and GrubHub fall into this category.
Give each one of these a shot. You never know how much extra money you may save.
- Finding Better Car Insurance on a Car You Rarely Drive
Maybe something we all did a little less of during the pandemic was drive. After all, there probably wasn’t much to see. And maybe this sharp decrease in travel time showed us that we tend to drive a little too much or more than is really necessary.
Fortunately, most car insurance companies offer low-mileage insurance policies for drivers who don’t cover a lot of miles every day. While not all car insurance companies report on the savings you can generate by switching to a low-mileage policy, State Farm offers low-mileage discounts as high as 30%; Travelers offers 10%. These policies are perfect if you’re looking for car insurance on a car you rarely drive.
Low-mileage car insurance helps you save money by driving less. Car insurance companies keep track of your mileage with telemetrics, or technology designed for gathering and collecting information on faraway objects. Should you fail to adhere to your low-milage car insurance policy’s miles, you’ll end up paying way more than you originally thought.
Usage-Based Car Insurance
Low-mileage car insurance is also referred to as pay-as-you-drive or pay-per-mile car insurance. These policies are usage-based car insurance policies that charge you either for each mile or each hour that you drive plus a monthly retainer that covers your car outside of its actual driving time.
Usage-based car insurance is often distributed in the form of a rolling subscription, affording you the flexibility to cancel or alter your policy when you want to. This type of car insurance is usually recommended for classic cars that motorists rarely drive. But with the many lessons we’ve learned from the pandemic, finding better car insurance on a car you rarely drive will help you save more money in the long run.
Luke Williams writes and researches about auto insurance for the auto insurance comparison site, CarInsuranceCompanies.net. His passions include best practices for personal finance, insurance, investing, and other ways everyday people can save money.
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