So let’s say the government gives you $1200 or some other amount of money due to the covid crisis. Should you buy a new TV or Peloton bike? Probably not. Here is why.We are in a recession. You may need that money later.
What are some good things to buy with this extra cash?
- Gas/petrol to go to work
- Clothes needed for work
- Healthcare. We are in a pandemic after all
- Stuff you need to work from home like an Ikea desk/table/chair or computer monitor. You may be there for a while!
- Savings. Save as much as you can in case things get worse.
Why do you say this? Well while we want to do our part we don’t want to be wasteful now only to be needy later in the year. I don’t think this recovery will be fast meaning V shaped. It will be a long, drawn out process over a year or longer. The recovery will likely be a swoosh shaped.
Things you should likely not buy
- A big screen TV unless you have no current tv for entertainment
- A fancy exercise bike or home gym. When this is over in few months you will never use that stuff again. Ride your bike or go for a walk instead. Buy a set of dumbells if you miss the gym.
- Travel. You don’t need to travel now even if the deals are good. Do you really want to be trapped on a cruise ship or in am airplane with a bunch of sick people? That will be expensive to spend time in the hospital. Once that $90K hospital bill comes you may need to move to another country.
- Luxury goods. That Gucci purse may be nice but it won’t look so good when you are living on your friend’s or mom’s couch.
So be prudent with windfall money. Treat it like you earned it!
Maybe you should save some of it for a rainy day. Do treat yourself to something small like a case or beer or a couple wine bottles. That’s it.