Managing Your Finances Post-COVID: Habits to Start, Keep and Drop

Managing Your Finances Post-COVID: Habits to Start, Keep and Drop article image.

Through December 31, 2023, Experian, TransUnion and Equifax will offer all U.S. consumers free weekly credit reports through to help you protect your financial health during the sudden and unprecedented hardship caused by COVID-19.

In all likelihood, the pandemic has affected your personal finances. If your job wasn't impacted, or you received COVID-related stimulus or unemployment benefits, you may have had extra money in your pocket. Unable to eat out, go out or travel, you may have used that extra cash to pay down debt and sock away savings.

As life returns to normal, how can you maintain these good financial habits, while still indulging in some of your potentially costly desires? Going forward, here are some financial and lifestyle habits to keep, some to drop and some new ones to start.

Habits to Keep

If you've already been maintaining the following habits during the pandemic, keep it up!

Penny Pinching

During the pandemic, you probably reduced or eliminated many normal expenses. Think carefully before adding them all back into your budget. If you learned to handle haircuts, car repairs and manicures on your own, would you rather start paying someone else again—or keep doing it yourself to save money? You could keep running in the park instead of reinstating your gym membership, entertain at home instead of dining out, or ask to work from home instead of commuting again.

Contributing to a Savings Account

Even if your income wasn't affected, the pandemic hammered home the importance of maintaining an emergency fund. About 1 in 3 employed people in an Experian survey reported saving more in 2020 than during the same period in 2019. You should have an emergency fund that can cover three to six months' worth of living expenses—more if your income fluctuates or your industry is prone to layoffs. Once you've got enough in your emergency fund, start saving for other goals, such as a down payment on a home, a new car or a vacation.

Paying Down Debt

Consumers' average credit card balance dropped by 14% from 2019 to 2020, according to Experian data. If you paid down high-interest balances during the pandemic, don't let them creep up again. Do you still owe high-interest debt to several creditors? A balance transfer credit card or debt consolidation loan could make it easier to chip away at your debt.

Increasing retirement savings

Employee and employer contributions to company-sponsored retirement accounts remained relatively steady during the pandemic, according to the Center for Retirement Research at Boston College. If you've maintained your retirement contributions, why not increase them if your financial situation allows? Consider bumping up your retirement contributions a percentage point or two each year until you're saving 15% of your pretax income for retirement. Not every employer offers a match on contributions, but if yours does, not contributing enough to maximize your 401(k) employer match is essentially leaving money on the table.

Habits to Drop

While they may have helped you get through the past year, these habits can be left behind as you move forward in a post-pandemic world.

Being Overly Cautious

Just as seniors who grew up in the Great Depression may stash their savings under the mattress, you may struggle to let go of financial fears the pandemic triggered. However, keeping too much of your money in savings accounts that accrue very little interest may rob you of the opportunities for long-term growth that investments can offer. It's OK to keep saving money; just be sure to diversify it. If you have enough to cover expenses, your debt is under control and your emergency fund is sufficient, redirect extra cash to long-term investments. These can include your retirement account, your children's college fund, or stocks, bonds and mutual funds.

Spending Recklessly

A year trapped at home may have spurred a spending habit. Perhaps you redecorated your house, developed a "retail therapy" habit or got used to having gourmet groceries delivered. As expenses like commuting and childcare come back into the picture, you'll need to rein in these pandemic splurges to balance your budget. Consider which little luxuries you can do without and which you want to keep.

Habits to Start

To prepare for life going forward after the pandemic and keep your finances on track for the long haul, here are some habits to start if you're not doing them already.

Plan for 2021 Taxes

Between economic stimulus payments, payroll tax deferral, unemployment benefits and other COVID-related relief measures, your 2020 state and federal tax returns probably looked a lot different than you expected when the year began. If your tax bill or tax refund was larger than usual, adjust your tax withholding for 2021, aiming to withhold exactly the amount you'll owe.

Consider Refinancing Loans

As interest rates dropped in 2020, many people refinanced mortgages or student loans. The Federal Reserve has announced plans to keep benchmark interest rates near zero, so if you haven't refinanced yet, you may want to investigate your options.

Make a Budget

Your spending habits probably changed during the pandemic, and they're likely to change again as it ends. Think about what life will look like post-pandemic, including expenses like commuting, eating out and childcare that may have been on hold. Then create a budget that accommodates these needs. Be sure to budget for a few "splurges" to satisfy pent-up desires like fine dining (inside a restaurant!) or taking a family vacation.

Review Your Financial Goals Annually

Do you have life insurance and a will? Are you saving enough for retirement? Do you need to adjust your 401(k) or other investments? How's your emergency fund doing? Set time aside every year to do a financial checkup and make any adjustments needed to stay on track.

Automate Your Finances

Automatically transferring money into your savings or investment accounts each month eliminates the temptation to spend the money instead. Set up automatic credit card payments and loan payments, too, and you won't have to worry about missing a due date (and possibly damaging your credit). Just make sure there's enough money in your account when transactions post.

Assess Your Credit Cards

If your spending habits changed during the pandemic, consider getting a credit card that fits your new purchasing patterns. For example, you might want rewards for grocery shopping or streaming subscriptions, an introductory 0% annual percentage rate on balance transfers, or travel rewards to put toward that long-deferred vacation.

Monitor Your Credit

If you have big financial plans in the future, it's more important than ever to keep an eye on your credit score. Your credit reports from all three credit bureaus are available for free through And you can see if your credit has been affected either positively or negatively by taking a look at your credit report and score for free through Experian. Consider signing up for free credit monitoring to keep tabs on your credit score going forward.

Help Others

The pandemic may have spared your family and your finances, but millions of people worldwide aren't as fortunate. Commit a percentage of your income to giving back: Donate to charities, shop at local small businesses, and tip restaurant workers and other service providers generously.

Financial Fitness for the Future

COVID-19 forced us to think carefully about what really matters and where our money can make the most difference. The memories of the past year may fade in time, but many of the financial habits we learned from it are worth keeping. As the world returns to normal, maintaining a mindful attitude toward your spending will help you manage money more intentionally, enhancing both your own life and the lives of others.

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