3 Simple Steps to Prepare Your Bank Account for Life After Quarantine

COVID-19 has given everyone around the world both time and space to reflect on what individually matters most in life. Whether it’s the chance to walk around outside, or the opportunity to spend more time with your kids, knowing what brought you joy during quarantine can help you learn to spend your money in ways that maximize your happiness. Equally important is knowing what didn’t bring joy to help you avoid wasting time and money. 

Here are three simple steps you can take to hold onto joy and let go of what brings you down as we all prepare to live our lives after quarantine:

(Psst…you can also do this exercise, but in less time, with the Mint app!) 

Step 1: Rate your spending categories 

Think about the last 30 days of your life. These are complex times, but you’ve most likely spent money very differently—more in some categories and less in others. Based on your last 30 days of spending, are there some merchants or categories that you usually spend a lot on, but you’ve realized they brought you limited amounts of joy? Are there merchants or categories that you usually don’t spend much on, but they’ve recently given you a substantial amount of joy? With the time and space to slow down and have more awareness, these are the questions you can ask yourself.   

Use the worksheet below to help you think through non-essential spending categories, and rate each one based on the among of joy it brought you:

Step 2: Review your spending and add up your totals

Use the Mint app, or your bank and credit card apps to review your spending in each category or from each merchant. Add up your spending totals from each column. 

Now, try to reflect on the amounts and spending categories where you’ve marked “Spent too much for the lack of joy I felt.” Why do you think you have been spending too much in this category? Is it because you got into a habit? Is it because you haven’t carefully considered this spending category?  And, if you were to reduce your spending in this category or from this merchant, how would you rather spend that money to bring you more joy? 

Step 3: Commit to a budget that adds more joy to your life

Are you ready to cut back on the categories or merchants that brought you less joy? Try starting with a small change. Alicia Butera, CFP® recommends starting with a 25% cut-back on the “spent too much for the lack of joy I felt” categories, and reallocating those funds to your “spent too little for all the joy I felt categories” categories. Try that out for a week or two and then re-evaluate how you feel. If it feels good, consider re-adjusting to 50%, then maybe even 75%. In terms of the “My spend to joy ratio was just right” categories, you can leave that alone for now, but continue to monitor for the ways in which those categories may make you experience more or less joy. 

Once you’ve completed steps one through three, let us know how it went in the comments below. Consider doing these steps every week for the next few months to become more aware of your spending patterns, change your spending habits, and most importantly, learn what brings you the most joy in life!

(Psst…you can also do this exercise, but in less time, with the Mint app!)