People are making big plans this summer, as vaccination rates tick up and COVID restrictions ease.
A recent survey by Country Financial found that after a year of conservative saving, people are ready to let loose.
The survey results show more than half of Americans (62%) currently feel good or excellent about their financial security. That’s up nearly 10% from before the pandemic.
Laurie Adams, a Country Financial representative based in Peoria Heights, said that security inspires confidence to spend.
“We've already got evidence in the marketplace that there has been a surge in consumer spending on the, for want of a better expression, stuff side—people spending that money on their home, people spending the money on furniture, people spending the money on clothing, for the first time in a long time. The retail numbers are just off the charts,” Adams said.
But Adams said that’s just the tip of the iceberg. What people really want to spend money on is experiences.
About two in three Americans are planning large purchases like a vacation or home remodel, according to the survey. Another one in 10 plan to go to a live show, concert or sports event this summer.
For those looking to hit the road, Adams said careful planning is more important than ever.
“My family is notoriously spontaneous. We will decide we're going someplace, we'll decide where we're going to stay and we may pick a couple of activities, but mostly we go and we explore. That's really hard to do right now,” Adams said. “It's really important that you do more research on where you're going (and) that you have a level of understanding on how much their economy is or isn't open.”
Adams said many attractions, like theme parks, are open. But they require advance reservations for nearly everything—from standing in line for a ride to eating at any of the restaurants. She said every community has its own rules on masking and social distancing that may be different from the attraction you’re traveling to visit.
She recommends turning the planning phase into part of the fun: let kids research the destination online and allow each family member to choose one activity they want everyone to participate in.
“By engaging everybody, you can create ownership, but you also can create a shared anticipation for the experience,” Adams said. “I think that's going to be really important because it will allow families to try and stay within a budget.”
When it comes to budgeting for a trip, Adams said it’s important to make sure some financial basics are covered.
Financial advisors generally recommend having three to six months worth of expenses saved in an emergency fund before spending toward other goals. Adams said if a family has diligently saved beyond the conservative end of that range, it’s OK to shell out a month or two of savings.
But she said many families are looking at lower-cost options, like exploring the great outdoors. The Country Financial survey found about one in five families want to visit a national park, or go camping this summer. About 40% indicated they want to head to a lake or the beach.
Adams said these destinations generally allow people to save money and stay in relatively low-risk environments for COVID. She said it also reflects a change in priorities in light of the pandemic.
“I'm finding that families in many cases had a reset of what they value. They learned to value spending time with each other much more. So I think in a lot of cases, they're less driven by the need to do, do, do—and instead focus on what can we do together,” Adams said. “If they're focusing on that, they probably won't spend as much money because the experience will be in the people, not in the place.”
Adams said she’s hopeful that this attitude and the penchant for saving that many built during the pandemic will continue, even after the economy fully reopens.
