This past week, at a neighbor’s drive-by 11-year old birthday gathering, I learned a new term: The Corona Purchase. The term refers to money spent on a larger one-time purchase amidst the sadness of being forced to stay home for the past three months. The concept also confirms an observation mentioned in a recent edition of TGIF 2 Minutes about families experiencing lower spending overall the past several months – so therefore possibly accumulating extra savings here and there.
Items reported to have been purchased or installed include:
- Cars
- Boats
- Home gyms
- Swimming pools (think: kids missing swim teams)
- Outdoor landscaping
- Small- and medium-sized home remodeling projects.
The purchases could also be smaller in scope such as simply buying a new bike (if you could find one)! Reports of these types of activities fascinates me as a financial planner. And there is a “silver lining” of sorts to these purchases in that perhaps people have been forced to think more deeply about spending and saving overall.
A handful of “corona purchases” may have added value to a home or saved money or monthly expenses in the long-term (in the case of a home gym) which is positive. My piece of advice is to continue to use this time to think deeply about all aspects of spending preferences plus to consider increased or new projects and vehicles (both outright and tax-deferred) for saving in the short- AND long-term.
Nearly no one in a generation or two has experienced such drastic, sweeping measures of shutdown. Yes, there have been wars and pandemics in recent prior decades but nearly nothing of this gigantic scale more recently. We are presented with an opportunity to consider the past several months and how steps taken today in terms of adjusting spending – and even more important increasing amounts and vehicles for saving – could lead to super exciting outcomes for the future.
In the meantime, I am absolutely aware that many, many people are suffering through this ongoing event. The ability to be – or to stay – financially independent depends on the critical concept of saving.