From worthy non-profits to local small business to online scammmers, everybody wants your money.
If you have money to spend on items beyond essentials like soap, toilet paper, and canned soup, how can you figure out where to spend your money to help keep the economy alive until the COVID-19 lockdown ends?
(Projections for the end of “Safer at Home” range from May 1 to the end of summer.)
Setting aside the scammers — may they ride a splintery bench in an overly warm region of the afterlife — a newly published paper from the National Bureau of Economic Research may prove helpful.
The focus of the paper is exploring how spending patterns have changed since the spread of COVID-19 became a common concern. The five authors of the paper report a dramatic change:
It’s a technical paper, so it has references and footnotes and graphs. Here is one of the graphs that can help you target your dollars to keep a heartbeat in your local economy:
The graph says that the only categories of household spending that remain higher than their level in the first two months of the year are, basically, grocery stores and (to a much smaller level) retail shops.
So assuming that you have disposable dollars, where should you spend them?
The short answer: local stores and restaurants. Take part in Takeout Tuesdays (and Wednesdays, and Thursday…) Fix up your house — paint, patch, redecorate. Put in a veggie garden, or rip out your front lawn and plant drought tolerant plants, buying supplies locally.
Other points of importance
If you leaned on credit to stockpile, prioritize paying those balances down! Consumer credit cards have notoriously high interest rates.
If you have much lower transportation costs — after all, you’re telecommuting instead of driving to work! — pay down those credit balances with what used to get pumped into your gas tank!
If you were laid off, apply for unemployment benefits to bolster your household budget. Find out if the layoff will be temporary or permanent. If permanent, start now to look for a new job!
Once we’ve passed through the worst of this, we need everybody’s personal budget in the best possible shape so consumer spending can bounce back and send the economy soaring.