No matter what you budgeted, what you actually spent tells the story. So as we approach a year into this ‘new normal,’ we wanted to share a comparison of our spending allocation pre COVID, now during COVID. Our goal is to see how COVID has affected our spending, and any interesting behavioral observations we can take away.
Before we continue, for context, we as a family have been very fortunate not to suffer impact to our income during COVID. No job loss, furlough, or any interruption whatsoever in our regular work. Only because things are the same on that end are we able to get an accurate spending comparison. We recognize this is a favorable position and absolutely feel for those who have been impacted negatively.
Our spending
Now, let’s dig into the data. The image below shows our different spending categories from the years 2019 and 2020. The data is displayed as a percentage of our total spending.
The graph is sorted by Column C, which is the percent allocation of 2020’s spending. Our highest expenses are at the top (reddish colors), and move on down to minimal ones (in greens.) For example, in 2020 the money we paid on rent in 2020 represented 20.0% of the total money we spent that year, in all categories. In 2019 the money we paid on rent was 16.7% of 2019’s spending. Column G tells you the % change from 2019 to 2020 in terms of dollars. So while 20.0% – 16.7% = 3.3%, what we’re actually calculating Column G on is the dollar change year to year. Lastly, there might be some significant % swings in some of the categories, but if they’re near the bottom that means they’re not big dollars. Now let’s look at some of the biggest areas where COVID has affected our spending.
Biggest spending increases
Groceries up 35%
During COVID we have sort of migrated away from Publix and Trader Joe’s, and now shop almost exclusively at Whole Foods. We used to go to all three, for different things, (holler at Trader Joe’s junk food) but each additional trip inside a store brings added exposure, so we stick to just Whole Foods these days. It could also be because it’s the closest of the 3 (even though they’re all within 2.5 miles #spoiled). Additionally, we try and bring the restaurant experience home by cooking ‘fancier’ food like my favorite, boneless grass-fed ribeyes. They are delicious, and they are not cheap.
So the increase is from us A) buying more groceries, B) doing it mostly at a store that costs a bit more, and C) splurging a bit. As a family of two, this category does feel ridiculously high, but it’s not like we throw away unused food. I’d be curious if anyone else’s Grocery spending ranks as their second-highest expense category, like us?
General Merchandise up 36%
This is our “Amazon” category, and we, like the rest of the country, started ordering more goods online since the pandemic. I attribute this behavioral shift partly to the desire to avoid additional trips outside the home, but it’s also a little bit of buying things out of boredom. Key takeaway is just to be responsible with e-commerce spending. Use it, don’t abuse it. Kudos to the platforms for making it absolutely frictionless to “add to cart” and “checkout” with a saved credit card.
Online services up 407%
This category sits near the bottom so it’s not a huge slice of the pie, but nonetheless represents a gigantic leap. The internet can bring some life to an indoor-centric world, as such online subscriptions have become a fixture in many people’s lives. Some we also used in 2019, but in 2020 we spent on subscriptions to things like Netflix, Pandora, Zoom, Adobe, Sweat, and Pimsleur. Bonus if you can guess whether Brett or Clari are using the Pimsleur language learning app, and which language they’re learning!
Biggest spending decreases
Restaurants down 34%
During normal times, Clari would eat lunch at her work cafeteria Mon-Fri, and Brett would probably eat out for lunch twice a week. Then we’d eat out an additional 2 or 3 meals on the weekend. At the start of COVID that changed to maybe once a week ordering takeout, and as things continued, we started incorporating restaurant food more frequently. But at its peak, we went from 10+ meals out per week, down to 1 takeout, really shrinking this category. Interestingly, the reduction in restaurant spending almost exactly matches the increase in grocery spending! It makes sense that instead of going to restaurants, you cook from home more, which ups the grocery tab. That said, the fact that it ended being an almost dollar for dollar flip between the two categories was surprising. So COVID has affected where we eat but not how much we eat.
Travel down 76%
This category ended up being the largest dollar decrease of any of our spending. We managed to do one Air BNB cabin getaway that we drove to in North Georgia, but stayed away from hotels, and did not take any plane trips. We cancelled a trip to Ireland that was set for April 2020, to celebrate my parent’s 40th wedding anniversary, and hope to reschedule that for 2022. Thankfully we received refunds for almost everything, but are still going back and forth with two flights we booked with Chase Ultimate Rewards.
Transportation down 59%
This is an average of Automotive, Gas, and Tolls, which are highlighted gray on the chart. They all are costs from driving to work, an area where absolutely COVID has affected our spending. The automotive category for us includes car repairs – oil changes, tire rotations, new tires, and mechanical fixes. The 2020 “drive to work” story for Clari was 100% work from home. For Brett, it was initially work remotely, and then by June/July a gradual resuming of work travel within the state. Overall it is still less than before, with the emergence of video calls. Lastly, we did buy a ‘new to us’ used car in Feb 2020 right before COVID, but I didn’t include that total here because buying a car is a one-off and not representative of our typical spending.
Clothing down 24%
If it wasn’t for video calls this would probably be a 100% reduction. But yeah, no need to freshen up the wardrobe as regularly when you’re only being seen on video calls from the waist up! Things like jewelry/accessories/shoes would also go here, and just haven’t felt as important during COVID. On the other hand, new workout clothes went a long way towards getting excited to workout in the living room (again).
Dry Cleaning down 14%
I honestly tried to make it the entire year without a trip to the cleaners but I ended up taking a ton of clothes in December. I’m pretty surprised it ended up being as high as it did.
Other notes
Some spending on home improvement goes a long way
Because we spent so much time staring at our walls, we did a few things to make the place nicer. We spruced up our patio furniture, added some accent lights, and knocked out a few DIY art projects. Looking back over a year of this situation, I would have liked to have had a few more accomplishments in this area, but I’m happy to have gotten a few done. Having a “project” to work on can help to pass the time, too.
Best new purchase
We picked up 2 inflatable stand up paddle boards from a friend who only used them once. This combines a lot of things we like – being outside, salt water, marine life, and exercise. Two people floating out by themselves on the intercoastal might also be the most COVID approved activity ever. If you’re interested, we got these 11′ Peak Expedition boards. Honorable mention to this softbox lighting kit we also bought, for all the Zoom meetings. These are both prime examples of things we likely wouldn’t have bought if it weren’t for COVID.
Best old purchase
About 5 years ago as an anniversary present Clari bought us a set of Bowflex SelectTech dumbbells. Previously, with gym memberships they weren’t used much. Now they have totally saved us because we aren’t able to go to the gyms we used to. They each max out at 52.5 lbs so you can definitely get creative with them. We are trying to add a couple kettlebells to the mix too, but they have been hard to find.
COVID spending conclusions
- COVID has affected our spending in several areas, but in general it was more of a shifting from one category to another. We feel like we resisted overboard spending induced by boredom or anxiety.
- Overall we spent 11% less money in 2020 than 2019. Again this does not count the car purchase, which if included would take us to 13.5% more.
- We picked up the habit of tracking expenses when we started our debt payoff. We use the free app Personal Capital to do it. Even if you don’t “budget”, you should at least know what you’re spending.
- I probably have too many different spending categories. I will likely consolidate some soon, starting with housing, food, and transportation, (the big 3) then going from there.
- We would love to hear from you! How has COVID affected your spending?