What the pandemic taught us about savings - Santander Bank High Yield Savings
What the pandemic taught us about savings
If we’re living on less and plan to continue some or all of these cost-cutting measures, there’s no reason why we can’t continue to contribute more each month to our savings.
One of the unintended consequences of the pandemic was the reduction in daily expenses for many Americans. Work-from-home mandates led to savings on commuting, eating out, travel, and many other weekly costs. The result, according to a report by Statista, was that by April of 2020, the personal savings rate jumped from an average of 7% to nearly 35% of monthly income.
But now as savings slide back downward (by March 2021 the rate slipped to 27%) and we’re starting to go out more to restaurants and shops, it’s a good time to contemplate the benefits of staying committed to saving. And, maybe even more importantly, decide what to do with the additional money you may have amassed during these difficult times.
Your chance to reset
Whether we’re natural savers or need to work hard each month to discipline ourselves to save more, we need to remember that we’ve been handed an opportunity to reset, reduce costs, and set more money aside for savings.
Take this time to re-evaluate your spending patterns and see what opportunities there may be to keep expenses at a reduced level, freeing up more funds for savings.
Commit to higher contribution levels
The central reason our savings may have grown was simply because we were forced to stay inside. But if we’re living on less and plan to continue some or all these cost-cutting measures, there’s no reason why we can’t continue to contribute more each month to our savings.
It’s a good idea to re-evaluate the percentage of income you contributed each month to savings before the pandemic and see if you can increase it now. For instance, if you were contributing 10% of your income prior to lockdown, but saving nearly 30% during it, it’s reasonable to consider dedicating 15% to 20% in the post-pandemic world.
To see how differences in contribution levels can affect your savings over time, we encourage you to check out our savings calculator. It can help you visualize the earning potential of your savings with different rates and contribution variables.
Revisit your saving goals
Another area where we can implement positive change is to revisit our goals for our savings and see what now may be possible to achieve.
Taking the time to revisit both our wants and needs is a great way to evaluate which goals have been met, which goals we can now fast-track to completion, and what new goals we can now consider that may have been out of reach before.
You may find that after keeping your expenses at a lower level and increasing your monthly contributions, you can now take that dream vacation sooner or remodel your kitchen this year.
Where to commit your savings
Finally, as to the question of where to put your savings, we have an easy answer. You’ve already opened a Santander® High Yield Savings account. The combination of a competitive interest rate, no minimum balance to maintain, and no monthly fee makes it an outstanding choice. It gives you the perfect balance between access to your money in case of emergencies and long-term growth potential.
There’s no doubt that the pandemic has been devastating for many around the world. But it’s also important to come out of this time with every positive lesson we can learn from it. Maintaining and growing our savings has always been an important discipline to have and embracing the lessons we’ve learned during this time is a great way to achieve this objective.
This article is intended for informational purposes only. Readers should consult their own financial advisers, attorneys, or other tax advisors regarding any financial or tax strategies mentioned in this article.
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