After a year of uncertainty and financial upheaval, Americans have become more thrifty.
Most adult citizens received more than a thousand dollars of stimulus money from the federal government during the COVID-19 pandemic. According to a survey from the New York Federal Reserve, citizens spent less than 30% of all stimulus funds, generally opting to save the money or lower their debt rather than pump it back into the economy.
In light of the tumult of recent years, saving is a perfectly logical strategy. Paying off debt generally earns a thumbs-up from financial advisers.
However, as the economy continues to heat up, spending some of those funds would inject the cash back into the market and could help brighten moods after a particularly difficult year for the country.
Financial experts in typical times advise paying off high-interest debt and building an emergency fund. But these aren’t typical times. Many citizens have remained trapped indoors in the last year either from fear of contracting the coronavirus or due to government-imposed lockdowns. Now that those rules are lifting and vaccines are widely available, it’s more than alright to drop some cash on a special treat or trip or something fun, especially for those who didn’t lose work during the lockdowns.
Those whose trips and vacations were canceled in 2020 can revisit the idea. (The European Union has lifted its travel restrictions for those who are vaccinated.)
Planning some family dinners out on the town could raise everyone’s spirits and provide a boost to the hospitality industry, which suffered a particularly harsh blow during the pandemic.
Of course, many did suffer severe financial hardship and have yet to recover. For those in this category, of course saving or taking a bite out of debt is most likely the better path.
Those who can afford to treat themselves, should do so. And they should also keep their neighbors and the less fortunate in mind moving forward. Giving to organizations that serve those in need would be a noble thing, indeed, and such generosity can often provide a more rewarding rush than spending for personal pleasure. Churches, social service agencies and charities are all organizations deserving of support as they work to make sure neighbors don’t fall through the cracks.
After a year of anxiety and doom and gloom, taking a moment to invest in a bit of happiness could be a good idea.
