CHELSEA FAGAN: Hey, guys, it's Chelsea from The Financial
Diet.
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And today, I want to talk about what
I think is one of the most important
financial considerations coming out of this pandemic, which,
I don't know, I feel like that goalpost is constantly
getting moved as far as when we're actually coming out
of the pandemic.
But at least for me personally, I
can say that my life has mostly resumed normalcy.
So I can officially put myself on the coming out
end of the spectrum.
CHELSEA FAGAN (SINGING): I'm coming out,
I want my booster shot.
CHELSEA FAGAN: And that important thing to focus on
is what not to spend on post-pandemic because you
may be one of the lucky people who actually saved quite
a bit of money during lockdown.
Between April and June of last year,
Americans socked away more than 25% of their disposable income,
compared to 7.3% over the same period a year ago.
Or maybe after a period of unemployment,
you are back at a different and possibly better-paying job.
Either way, if post-pandemic you find yourself
with more disposable income than usual
and a stress-induced urge to spend,
or pandemic-induced spending habits to continue,
it is important to be vigilant about your own spending habits.
Because as we re-emerge into a greater and greater sense
of normalcy, there are more and more opportunities to spend
and, especially with that feeling of oh,
I haven't gotten to do this in so long,
an incentive to go a bit overboard because so
many things being available to you after so long of them
not being available can cause your brain
to feel legitimately overwhelmed.
In his pop psychology book, The Paradox of Choice,
American psychologist Barry Schwartz
described how too many choices can be overstimulating and also
paralyzing and can cause us to make decisions
without considering all of the alternatives or consequences.
So now is an excellent time to slow down, analyze
our spending, and analyze the thinking behind that spending
so we don't fall into these post-pandemic spending traps.
Now, I'm going to kick this one off with the same one
I kicked off the spending after 30 video not too long ago,
and that is a lot of alcohol.
Now, I spoke in the last video about how
buying cheap alcohol, which is something
that happens a lot in our 20s, is something to avoid,
pretty much unilaterally, as we get older.
Because honestly, most Americans could probably
stand to drink a bit less, and buying higher quality stuff
basically forces your hand into doing that,
among other reasons.
That cheap wine is just gross.
But even if you're buying really good stuff,
chances are, post-pandemic, you may be buying too much of it.
And now that this is a time in which we are all
getting to go back out again, have parties with friends,
attend weddings, meet up in bars,
and do these things that we were deprived of for so long,
there can be an extra incentive to go a little overboard.
Because consuming too much alcohol
has consequences for both our money and our health,
the irony is drinking actually increased
quite a bit during the pandemic despite
our limited social lives.
According to a Rand Corporation study, stress from the pandemic
resulted in a greater amount of drinking
from women but not men.
Women were also found to have increased their heavy drinking
days by 41% during the pandemic.
And a survey by Harris Poll found
that millennials spend an average of $300 per month
on alcohol in a non-pandemic year, which is already
a lot when you're not also adding on
to it the post-pandemic feeling of everything is worth
spending on.
We're not saying you have to be totally dry,
but taking a close look to the amount and the frequency
with which you are spending on alcohol
is incredibly important, post-pandemic.
Mix it up, buy some weed.
Number two is personal training, diets, fitness plans, or other
get your pre-pandemic bod back spending.
According to the American Psychology Association,
61% of Americans reported unwanted weight changes
during COVID.
42% said they gained weight at an average
of about 29 pounds per person.
And let's be clear, there is no shame
in gaining that quarantine 15, or 20, or 30,
or whatever it may be.
Your body got you through a pandemic.
It was a once in a lifetime, incredibly stressful situation.
Give yourself a break because gyms were closed
and eating blocks of cheese sometimes
was the only thing that made us feel better
after an incredibly-depressing day looking at a Zoom screen
while sirens went off around you.
But let's be clear, if losing weight is a goal for you,
there's nothing wrong with that, either.
But pouring a lot of money into the act of losing weight
is a common trap that Americans fall into,
and it's especially predatory right now with the diet
and fitness industry being incredibly aware of the fact
that many Americans may not be feeling great in their bodies
right now and are willing to spend
to feel at least like they're addressing the problem.
Lessons.com ballparks the cost of a personal trainer
at $40 to $70 an hour.
Meaning two hour-long sessions per week
would equal $250 to $400.
There's also services like Noom, which
cost $59 a month, while the most sustainable way to find
a healthy lifestyle is to ease into something
that works for you at a rate that works for you.
An all-or-nothing approach is part
of the reason 80% of people who lose
significant weight don't maintain
that loss for 12 months.
Perhaps you can find an affordable gym near you
that works into your schedule and lifestyle,
or simply make some swaps with how
you eat that coincide with cooking more at home
and being more conscientious about the ingredients you use.
But we often, as Americans, fall into the fallacy of thinking
that if we throw a lot of money at the problem of changing
our bodies, that will make us accountable to doing it.
But decades of data shows that is not the case,
no matter how much the post-pandemic weight loss
marketing is bearing down on us from all angles.
Give yourself permission not to spend a ton of money
on what are ultimately unproductive
and unsustainable weight loss methods.
Number 3 is a new vehicle.
Now ignore this if your current vehicle suddenly
burst into flames, as my old vehicle once did,
or you suddenly had to move from a place
where you didn't need a car to one where you do.
But if you were looking at buying a car simply
because you're not as comfortable on public transit
as you used to be, or it just feels like it's
time for an upgrade, this is an opportunity
to pump those brakes, a ha.
Vehicle prices have risen largely
due to supply chain disruptions and production slowdowns.
In September, the price of an average new car
was more than $45,000, which is up 12%, year-over-year.
And even used cars have been affected by price increases
and inventory shortfalls.
Used car dealers' supplies have fallen short
because activity that usually leads
to those dealerships getting stocked,
including trade-ins, lease returns, repossessions,
and cars that formerly served as daily rent-a-cars are down.
Now, the average used price is sitting at about $25,000,
up more than $5,000 from the same period a year ago.
And inventory is expected to catch back up by 2023,
meaning that if you can wait for a new car,
now is the time to wait for that new car.
Because if you buy it now, even if it's pre-owned,
you are likely to be overpaying.
Number 4 is a pet.
Now, we all know that I love my daughter, my human daughter,
Mona, who I gave birth to out of my very body.
I am always supportive of people being on their pet journey
with asterisks.
Because let's be clear, the fact that I
had my actual, literal human child Mona during the pandemic,
especially during the long months
where I was separated from my husband due to immigration
issues, did nothing short of save my sanity.
But the truth is a lot of people kind of picked up on that
during the pandemic and went out and got themselves
a pandemic pet, which, on aggregate, was bad.
Unfortunately now, according to Best Friends Animal Society,
owners returned pets at a rate 82.6% higher in 2021
than in 2020.
I won't go into detail, but I saw
an article a couple of months ago
about a woman who adopted a dog that she was clearly not
prepared for into a living situation that was not adapted
to that dog's needs after not owning a pet before,
and, after a couple of months of that dog
exhibiting anxiety-induced aggressive behavior,
put the dog down because she claimed no one else, including
the adoption service, or I guess sanctuaries, would have taken
the dog, which seems extremely dubious to me.
But I read that, and it stuck with me for days.
I was like this pandemic has made
people feel like pets are just a thing that you go out
and get for fun.
And we'll see if it works out, and if it doesn't, we'll
just give it back to a shelter that
will likely have to euthanize it,
or I'll just get it euthanized.
Listen, I eat meat.
I'm not an animal rights activist, but Jesus Christ,
what is going on in people's minds?
Because being a pet owner can be a transformative and beautiful
thing for humans, but it's also something
that is an incredible responsibility.
I'm sorry, but in my opinion, you are not getting a pet,
you're getting a new family member.
Treat it as such, and most importantly, understand
that in the case of a dog or cat,
you're looking at 10 to 20 years of commitment to this animal,
meaning that you have to be pretty clear that not only
is your life today adapted for it,
it's adapted for it long term.
A lot of people got pandemic animals
when they were working from home,
and now that they've returned to the office,
have given them away because the animal is no longer adapted
to their lifestyle.
This makes you a bad person, and pets are almost always
more of an expense than you realize, even rescues.
So pandemic or not, a lot of consideration and planning
has to go into it.
According to Money Under 30, annual costs for dogs
can run from $380 to $1,170, and cats can run anywhere
from $430 to $870.
Considering the rehoming statistics right now,
at least wait a while before you get a new fussy friend.
Number 5 is vacations just for the sake of them.
Now of course, vacations and travel, more generally,
are something we all missed.
So it's understandable to want to get back out there
and hit the ground running.
However, vacations and travel, more generally,
are already expensive, and in this time,
these prices are only going up.
The number of Airbnb listings has dropped year
over year, and with higher demand, comes higher prices.
Some also increased their minimum required days
of staying.
For example, between March 2020 and May 2021,
Airbnb locations in Jersey City saw their average minimum
stay rise 195% to 20.8 days.
In the first quarter of 2021, Airbnb
stated that, although its overall business had decreased,
daily stay rates of participating properties
rose an average of 35% year-over-year.
And for air travel between April and May
alone, airfare rose 9% for domestic travel and 17%
for international travel.
And while costs aren't back to pre-pandemic levels yet,
there is a correlation between the demand for travel
and the price of airfare, and the same goes for hotel prices.
Plus, in the US, retail gas prices
are also at a seven-year high.
And beyond that, traveling can still, in a lot of ways,
be cumbersome like the absolute Greek mythology level
journey I had to go on to get my frickin' COVID test in Quebec
City that then nobody at American customs
even bothered to look at.
So being choosy with your travel right now,
not jumping at any given opportunity,
but really selecting the trips that are right for you,
that are not price gouging you, and that
fit into your overall lifestyle is incredibly important.
Number six is a massive wedding.
Now listen, I understand the risks
that come with the territory of wading into wedding waters,
but it does bear repeating at this time.
Just because you can have a massive wedding,
doesn't mean you should, especially now.
Even pre-pandemic, the cost of weddings
had steadily been rising.
And according to The Wedding Report,
the number of weddings in the US is
expected to jump by 50% this year,
due largely to the backlog of canceled weddings in 2020.
Once again, rising demand equals rising cost,
especially as vendors look to offset what
they lost during the pandemic.
In October 2020, more than 200,000 couples
owed a collective $3.7 billion on weddings canceled
due to COVID, according to a study
from online personal lender Loanry.
So if you've already lost money in that regard,
although it can be tempting to just double down
because you feel like you got robbed,
it's important to really take this time
to consider how you can make the make-up
wedding, or the post-pandemic wedding,
generally, as cost effective as possible.
And the easiest way to do that is
to trim that damn guest list.
Now, I know that everyone's not going to be as extreme as me
and have a 30-person wedding, but post-pandemic, do we really
still need 200-person weddings.
Do you know 200 people?
I don't know 200 people, and I have almost 1
million subscribers on YouTube.
Number 7 is a new wardrobe.
Whether you're going back into the office,
you want that post-pandemic refresh,
or you're a totally different size after being quarantined,
the desire to get an all new wardrobe
is at an all-time high.
In March, when vaccination rates hit a crucial threshold,
clothing stores saw sales rise by 18.3% in the US
and 24% in Canada.
The top five items driving purchases
included t-shirts, jeans, active pants, coats,
and non-sports bras.
Of Canadians age 28 to 34 surveyed by NDP group,
28% said they're completely overhauling
their closets post-pandemic and plan to wear only new clothing.
But again, just because you can doesn't mean you should.
If you have clothing items that sat
through the majority of 2020 and 2021 not getting a lot of wear,
that means that, frankly, there's
no reason you shouldn't be wearing them to the office,
to a restaurant, or to visit with friends.
A complete overhaul won't just cost you a lot of money.
It's also statistically likely that most of it
will eventually end up in a landfill.
So going out of your way to do a thorough closet audit,
removing to donate or recycle absolutely everything that
is not an a-list item, and only selectively opting
for the items that will complete a capsule wardrobe
is the better way to do it.
It's understandable to look at a post-pandemic closet
and just have that feeling of oh, I hate everything,
but chances are with a few new additions
and especially removing all of the things that you don't love,
you'll feel like you have a whole new look with only buying
like 10% new items.
Number 8 is self-help books and seminars,
except for The Financial Diet, available
we're all fine books are sold.
It is no secret that mental health hit an all-time low
during the pandemic because during the pandemic,
four in 10 US adults reported symptoms
of anxiety or depressive disorders, up from about one
in 10 during 2019.
And unfortunately whenever mental health is precarious,
that presents an insidious opportunity
for the self-help and self-improvement industry,
which as of this year was valued at $10.4 billion.
While live events and motivational speaking spending
decreased during COVID, spending on self-help books, especially
audio books, increased.
The self-improvement audiobook industry
was valued at $541 million this year,
an increase of over 20% year-over-year.
And the pandemic also saw high sales
for books about trauma, such as The Body Keeps the Score
and What Happened to You.
And the problem is often that these books
don't address what people have actually gone through
over the past year.
Because while The Body Keeps the Score and What Happened to You
are insightful books about the nature of trauma,
psychology experts say that what they cover
doesn't really address the psychological effects
of the pandemic, but the average American
doesn't understand enough about psychology to know that.
And as for self-help books and seminars, many of those
are dubious at best.
Michael Ungar, a professor of social work, author,
and the Canada Research Chair in child, family, and community
resilience says the self-help industry
has failed miserably because it puts
all too much responsibility on individuals
to change their circumstances.
And that is, quote, incredibly victim-blaming.
If you want to change your mindset post-pandemic,
you are better off not buying those slew of self-help books
and seminars and investing in actual therapy that
can address the reality of what you're going through.
This is a reminder, as always, to check and make
sure to what extent your insurance, if you have it,
covers therapy and to check out free or affordable therapy
resources in your area.
My friend put together an incredible living Google Doc
that goes through just that.
I'll link you guys in the description.
Number 9 is luxe loungewear.
Loungewear was already on the rise, pre-pandemic,
with iconic loungewear looks being supported
by people like Gigi Hadid or Kim Kardashian
and statistically, millennials spending more time at home
compared to their parents' generation.
But throw in 18 months of working
at home for many adults, and you've
got the birth of a brand new cottage industry, which
is upscale loungewear.
But now that we're out of this post-pandemic haze,
it's important to remember that fancy loungewear may
be amongst the most ridiculous things
to be spending a lot of money on.
UK-based lifestyle brand Derrick Rose
sells micro-modal men's hoodies for 183 pounds,
or about $245 US, or women's PJ sets for 154 pounds,
or about $207 US.
Now, there is nothing that says that you can't treat yourself
to a bit of luxury every now and again, but spending a ton
of money on clothes that are basically, literally,
made to be slept in and can't functionally
be worn outside of the home, basically
commits you to dedicating a serious portion
of your wardrobe budget to the least functional pieces
of clothing in your closet.
Now, there's nothing wrong with getting a nice matching PJ set,
but that's a good thing to do at a TJ Maxx,
and sometimes you can get, honestly,
pretty good stuff there.
Investing in higher quality pieces
makes sense when it comes to things like outerwear, shoes,
or the clothes that you have to wear to work every day.
A cashmere snuggie just ain't it, honey.
Lastly, number 10 is an air fryer.
And I'm sorry preemptively to the air fryer hive
because you guys are intense and scary.
If you started cooking more at home during the pandemic,
that's awesome.
It's a great habit that a lot of people
picked up during the pandemic and hopefully, will carry on
through the rest of their more socially-adapted lives.
But one of the biggest traps with getting into cooking
is feeling like you have to spend hundreds,
or even thousands, of dollars on various gadgets
that ultimately you don't need.
And one of the most divisive home cooking
tools of the past several years has been the humble air fryer,
which, for a good quality unit, can run you easily over $200.
And here's the thing, an air fryer doesn't automatically
make the food that you're eating healthier.
Yes, it is healthier than deep frying,
but often, you're talking about results
that could just be achieved by roasting at a high temperature.
They also require quite a bit of dedicated cleanup.
If you really want the exact same results,
convection ovens are usually cheaper.
Although again, most of these recipes
can actually be achieved with a normal oven you likely already
have.
And here's the thing, if you really
are going to use an air fryer quite a lot,
I give you permission to buy one, but actually
challenge yourself to have several instances,
I don't know, maybe five, six in a quarter,
where you find yourself roasting something in the oven
to approximate the texture of an air fryer and are
like damn, I wish I had an air fryer.
Then you can go ahead and get one,
like if once a year you're making kale chips in your oven,
just continue making them in your oven.
You don't need an air fryer for this.
Just because they're everywhere doesn't mean you need one.
And as always, guys, thank you for watching.
And don't forget to hit the Subscribe button
and to come back every Monday, Tuesday and Thursday
for new and awesome videos.
Goodbye.