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How to budget for after the pandemic

The end of the pandemic will mean big things for your budget (among other things). Here’s how to plan accordingly.

Our pandemic year was unprecedented in many ways — including the ways in which we spent our money. In 2020, we all bought a few items we’d never expected to need (like “Zoom shirts” and “work-appropriate masks”) and many of us found ourselves foregoing typical annual expenses like holiday travel and summer vacations.

Now, as more and more people get vaccinated, things like travel and dining out will be back on the table — not to mention having a reason to wear non-sweatpants again.

What does that mean for your budget and financial situation? How can you prepare for the expenses that 2021 might bring, while still setting aside enough money to cover your bills, pay off your debt and save for the future?

Brendan Dooley, CFP®, CRPC® and owner of Meaningful Wealth Management LLC in Philadelphia, PA, is advising his clients to take advantage of the post-pandemic period by putting extra money towards the experiences they may have missed. “I am telling clients to go enjoy themselves, within reason. It’s been a hard year, and you can’t get that time back. I tell them we’re going to balance living life for today and making prudent decisions for tomorrow.”

Other financial experts suggest that we use this post-pandemic period to get back into financial shape — especially if you feel like your spending got a little out of control in 2020.

“Right now — before we lose the lessons of the pandemic — is the time to double down and take the steps needed to gain control of your finances and set yourself up for a financially stress-free future,” says Pamela Yellen, New York Times best-selling author and founder of Bank On Yourself.

What steps does Yellen, along with the other experts we consulted, have in mind? Here are four tips that can help you learn how to budget for your post-pandemic life — and help set you up for financial success no matter what the next year brings.

In this article:

Anticipate new expenses

Many of us rebalanced our budgets during quarantine, taking the money we might have spent on work lunches and wardrobe upgrades and putting it towards media subscriptions and backyard fire pits. As we return to a post-pandemic world, it’s time to rebalance our monthly budget yet again — and to start planning for the day-to-day expenses we might have forgotten about.

“Anticipate a change in cost,” says Lawrence Gonzalez, government auditor and founder of The Neighborhood Finance Guy. “Going to the work-from-home model alleviated transportation costs, meals and even childcare. Add at least a 30% increase in spending buffer back into your budget so that you aren’t spending money you don’t have.”

If you need help setting aside money for post-COVID expenses, start by asking yourself where your costs might have increased during the pandemic — and see if you can cut back in some of those areas by setting a monthly budget. “Though there may have been some regular expenses you didn’t spend on during the past year including travel and childcare or gas and commuting costs, you likely took on other costs such as additional entertainment bills and video streaming services or perhaps financed a Peloton that you are now paying a monthly fee for,” says Andrea Woroch, a nationally-recognized consumer finance expert who provides simple budgeting tips for busy moms. “Figure out which monthly expenses you took on during COVID that you can cancel.”

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Wait before making non-essential purchases

If rebalancing your budget frees up enough money to cover the costs of a post-pandemic world and improve your financial situation, great. However, most of us will probably want a little more wiggle room in our budgets — which brings us to our next expert budgeting tip.

“Set spending rules,” says Yellen, “such as waiting seven days before purchasing any item over a certain dollar amount that isn’t absolutely essential.” Yellen notes that if you give yourself a waiting period before making non-essential purchases, you might be surprised at how many of those purchases go unmade — and how much money you’re able to save.

Tana Williams, a personal finance blogger who paid off over $27,000 of debt in 17 months, agrees. “By putting yourself into a spending time out, you’ll slow your roll and keep from snowballing further into debt. To take it a step further, you can set aside the money for the items on your list in savings while you wait for the week to pass. Then, you’ll have the cash to buy what you want, or you can throw it into savings.”

Increase your travel budget

Once you start saving a little extra cash from your monthly income, either by rebalancing your budget or avoiding unnecessary purchases, what should you do with the extra money? Some people might want to put their savings towards a long-term financial goal such as getting out of debt or setting aside a down payment. Other people might want to follow our expert advice and put at least some of their extra money towards travel.

How much extra money should you put into your budgeting app from your monthly income? Dooley thinks you might want to increase your travel and dining budget by as much as 50% when creating a financial plan for your coming year. “Spend time catching up with people,” he explains. “If and when you’re vaccinated and feel comfortable, make plans to go to dinner with old friends. Hold your grandchildren at ‘just because’ parties. Book the beach house you’ve always wanted to for a week.”

If you feel guilty about spending your savings on restaurant meals and beach houses instead of putting that money into an IRA or investing it in a 529 Plan, tell yourself you’re making an investment in the people who matter most to you. “Relationships are important and Zoom is not the same,” says Dooley.

Dooley also suggests keeping this budget increase limited to a single calendar year — and to go back to your typical spending habits in 2022. “This isn’t a lifestyle change, but a temporary way to try and recoup a small sliver of the joy the pandemic took from us.”

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Build your emergency fund

In addition to increasing your travel budget, you might also want to put some extra money into your emergency fund — especially if the pandemic drained your savings.

A new survey from the Pew Research Center finds that 44% of lower-income people say they have dipped into their retirement or other savings since the start of the coronavirus crisis,” Woroch explains. She suggests using the pay-yourself-first strategy to build your emergency fund — that is, to have a percentage of your paycheck automatically deposited into your savings account, or to put money into savings at the same time that you make your monthly bill payments. “This way, you aren’t tempted to spend that money on unnecessary purchases.”

How much should you have in your emergency fund? Experts often suggest setting aside three to six months of monthly expenses — but if there’s one financial lesson we’ve learned in 2020, it’s that major life disruptions can last a lot longer than three-to-six months.

“Realistically, it could take 18 months to two years or more for things to get back to normal for many people financially,” says Yellen. He suggests that you start by setting aside what you can — and slowly boost your savings rate over time. Every time you cut an everyday expense or pick up a new income stream, for example, see if you can add a little extra money to your emergency fund. “Increase your savings by 1% or 2% whenever possible, and you won’t feel the pinch.”

These four tips — anticipating new living expenses, avoiding unnecessary purchases, investing in relationships and saving for emergencies — can serve as the foundation of your post-pandemic budget. Remember, the way you spend your money in 2021 might be as unprecedented as the way you spent it in 2020 — so use the advice offered by our financial experts to create a spending plan that allows for both flexibility and stability. That way, you can start preparing not only for a post-pandemic year, but also for the financial goals you hope to achieve in 2022 and beyond.

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About Nicole Dieker

Nicole Dieker has been a full-time freelance writer since 2012, with a focus on personal finance and habit formation. In addition to Haven Life, her work regularly appears at Lifehacker, Bankrate,, and Vox. Dieker spent five years as a writer and editor for The Billfold, a personal finance blog where people had honest conversations about money, and is the author of Frugal and the Beast: And Other Financial Fairy Tales.

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Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our editorial policy

Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.

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