For lunch Thursday, Will Benedetto ate four hard-boiled eggs.
For dinner, he and his girlfriend are dining at Flying Squirrel, a Chattanooga, Tenn. restaurant where a hangar steaks go for $21, ramen with roasted pork belly costs $20 and local trout is priced at $18.
“If we want drinks we’ll get them. If we want a bottle of wine, we’ll get it. If we want appetizers, we’ll get them,” said Benedetto, 30, who isn’t going with a maximum money allowance in mind.
It’s a brief flash of what Benedetto calls “enlightened hedonism.” The fully vaccinated couple hasn’t gone out often since they moved to Chattanooga from Brooklyn, N.Y. last June. “We have that thirst to date one another, instead of cohabit with one another. It does feel necessary to engage in life.”
Outside temperatures are rising, just like vaccination rates. Fancy a boat trip in the local park to ease your way back into the New Normal? Or a new basket for the puppy you adopted during the pandemic?
After the long days and nights of 2020, Benedetto and many other Americans want to get out, spend money and, well, splurge. But financial advisers say they should do this responsibly and not go too crazy. If 2020 has taught us anything, it’s always be ready for the unexpected.
States keep pulling back their restrictions on mask wearing for vaccinated people in public spaces, including New York, New Jersey and Connecticut. European Union ambassadors are meeting Thursday to discuss guidelines for the 27-member bloc for opening its borders to fully-vaccinated travelers.
Meanwhile, companies are already raking in profits on the sales powered by pent-up demand. For example, Target
reported all-time record high earnings on Wednesday and Bloomin’ Brands
the parent company of national chains like Outback Steakhouse, said comparable sales soared from March to April.
‘It’s less of I’m going to do this no matter the consequence. It’s more like, I really want to do this for my mental health.’
— Financial coach and counselor Garrett Philbin
Nearly half of people polled by Charles Schwab
are keen to live large, and get back to their spending levels before the COVID-19 pandemic. What’s more, almost a quarter say they want to splurge and make up for lost time, the survey, released this month, found.
But their dreams are modest — namely, spending time with family and friends. The Schwab 2021 Modern Wealth Survey found that Americans are dreaming most about traveling (40%), socializing (30%), taking an extended vacation (24%), dining out at upmarket restaurant (21%) or throwing a party for family and friends (15%).
Such decisions are being made all over the country. Financial coach and counselor Garrett Philbin has talked with clients about their upcoming spending plans — like the client who’s going to fill her summer with trips to weddings and bridal showers, or the one who’s already deciding to spend more to go out with friends.
Philbin said conversations go a little like this: “It’s less of ‘I’m going to do this no matter the consequence.’ It’s more like ‘I really want to do this for my mental health. I haven’t seen family in forever. I want to do this and how can I do this in a relatively responsible way?’ I honestly think the thing they want is some permission.”
Philbin, the founder of Be Awesome Not Broke, helps his clients plan their expenditures — responsibly. That might involve advice on a temporary tweak on the amount of money earmarked for debt or long-term goals, while still putting money aside to enjoy their life.
But after a year of uncertainty and three rounds of stimulus checks, he says people need to put their ambitions in perspective. “The percentage of extra money going toward goals is getting smaller for the short term — and the amount for fun is getting bigger in the short term, to release that pressure valve,” he said.
After a year of uncertainty and stimulus checks, financial advisers says people need to put their ambitions in perspective.
Is it any wonder? People are exhaling after living paycheck to paycheck. Millions of consumers used their $1400 stimulus checks to pay off their debts and household bills. This bill-pay service found a 30% increase in the number of payments from March 17 to March 21, and the total amount of payments made were 37% higher as compared to the same period last month.
There are signs that people are already thinking ahead to work rather than play, and making sure they have a head start when they get back to the office. Americans will spend an average $747 on new office clothes, shoes and office décor as they return to the office, according to a more than 2,000-person LendingTree survey.
Actions now need to be tempered by the memory of the pandemic’s earlier stages, when so much suddenly felt in free fall. “Remember how careful you were with your purchases during the height of the pandemic when resources were limited, the future was uncertain and your budget was super tight?” said Ana Gonzalez Ribeiro of Rise Up Financial Coaching.
“Think in those terms, but remember to make room for your well being and definitely treat yourself responsibly and give back to the community when your budget allows.” Indeed, as the pandemic cost millions of people jobs, wealthy donors focused more on their own communities in 2020, increasing donations to local charities, individuals and businesses, recent research found.
The Association for Financial Counseling & Planning Education is offering free access to financial counselors and coaches for people seeking money guidance and support during the pandemic.
Here’s some advice on spending money so you can have fun without being too frivolous:
Reflect on what matters
What is the purpose of your spending? asks Brittany Davis, a financial counselor and associate financial planner at Brunch & Budget. “Now is a great time for people to reflect on their values post-lock-down,” she said. “COVID forced us to evaluate what’s truly important to us and how we took those things for granted.”
Her advice: “Be intentional about spending in areas that align with your values and get rid the spending areas you could live without.” Step back from the computer late at night, and put off decisions. It’s all too easy to toss items in a virtual cart on eBay
She recommends taking one day a week to review what should and shouldn’t stay.
“This makes shopping more intentional and less impulsive when you can stop to weigh your decision. This is especially relevant for those that impulse buy in the middle of the night. We call it having an ‘Amazon day.’”
Negotiate with yourself
If a person’s identified what matters to them and what ‘s worth spending money on, the next step is figuring out how much money to spend.
Jen Hemphill, a financial counselor based outside of Washington D.C. said always advises people to leave money in their budget for their “splurges” or the things they want vs. the things they need. Doing that makes a person “more prone to stick to their goals,” because they don’t feel like they are denying themselves, she said.
Suppose the thing a person really wants to do is go out for coffee, or a movie, Hemphill said. They need to ask themselves how often they would want to do it in a month or a week, and then ask themselves how much they would want to spend each time.
Take that dollar amount and apply it against the rest of the budget devoted to other costs, necessities and goals to see how that fits, or doesn’t fit. “It’s basically you negotiating with yourself,” Hemphill said. “From there, that’s where you determine your number.” That number could be an actual dollar amount or a percentage, she noted.
With the splurge identified and in the budget, Hemphill advises people to separate that money from the rest of their budget. It could go to a different bank account, or it could be cash in an envelope or a favorite piggy bank from childhood or one you found in a jumble sale, Hemphill said. “If you separate it, you see what you have.”
An approach like that reminds you that there is a boundary and things you must do before you spend that money, but Hemphill said it’s also a fluid situation where you can afford a little extra spending now and then from that account or jar. “Be flexible, be patient and have some grace with yourself,” she said.
Philbin wants to give his clients time to enjoy the moment and recharge. In a couple of months, he will circle back to see how they feel about a spending plan that’s more focused on finding the fun in the here and now. The client might stick with it, or find a new approach. “A plan is never static,” he said.
“Money is inherently emotional,” Philbin added, “and so expecting people to ‘stick with the plan’ as they recover from a once-in-a-lifetime event isn’t realistic. It defies human nature.”
Back in Tennessee, Benedetto is getting accustomed to a less pricey way of life. For example, he has cut down on streaming services and works out with kettle bells instead of getting a gym membership like he had in New York City.
But a good meal at a restaurant gets to a core part of his life. Benedetto is a consultant for bars and liquor companies and his girlfriend also works in the hospitality sector, so dining out is their stock and trade — but also much more.
Going out and being in the world is important to him. “We miss whatever normal was,” he said.