Advisors hear lots of complaining during the pandemic. People are locked down at home. Barbershops and hair salons are closed. You can’t fly overseas on vacation or book a cruise. From a financial planning point of view, there’s a major upside: Clients are spending lots less money because they are stuck at home.

As of June 5^th, the U.S. unemployment rate was 13.3%. This implies 86.7% of Americans are still employed. That’s likely overstated because retirees and those on disability aren’t looking for work because they have an income. Lots of other factors go into the mix. However, it stands to reason lots of Americans are working from home and collecting an income. Many of your clients likely fit into this category.

We all know the economy is driven by consumer spending. It’s been said it accounts for about 70%.  The consumer not spending is a big setback for the economy. The flip side is reduced spending is a benefit for your client’s personal finances. This is a worthwhile conversation to initiate. The money they are “saving” could go into reducing credit card debt, paying down the mortgage or putting to work in their investment portfolio.

Where Is Your Client Saving Money? How Much?
Years ago, I wrote an article for American City Business Journals, “How You Can Spend $400 Every Weekend Without Knowing Where It Went.”  It’s worth a read because it’s a good starting point for your conversation.

Start by looking at your own life:

• Eating out. Some people claim their kitchen is “for resale purposes only.” It’s been said the grander the kitchen, the less likely it’s ever used. Most people haven’t been to a restaurant for almost four months. They’ve been eating at home. Even if you eat out once a week for an average of $140.00, it adds up over several months.

• Dry cleaning. When was the last time you were there? Enough said. 

• Haircuts. Are you starting to look like Einstein? Robinson Crusoe? Bozo the Clown? You are saving a lot.

• Vacation travel. This is a big number. If a vacation runs a few thousand, counting in the extras, this is money you aren’t spending. Even if restrictions are relaxed, you will likely be driving, not flying.

• Movies. New releases (like James Bond) have been delayed to the fall. You are watching movies on your streaming service at home. You’ve saved on popcorn too.

• Sporting events. You aren’t going to games. Ditto concerts. All your entertainment comes through your TV.

• Drinks with friends. There are no Friday nights out. It’s done on Zoom now. You are drinking your own booze at home. This can be a big savings over time.

• Charity galas. This is a huge blow to the nonprofit sector. There was no spring gala season. If you attended a few $250/head events to raise your visibility in the community, you are likely mailing them a smaller check instead.

• Gasoline. A U.K. friend jokes they are getting “Four weeks to the gallon.” Yes, gas prices are cheap, but there’s no need to fill up.

• Car repairs. You aren’t taking your car in for scheduled maintenance because you haven’t put on the miles to hit the threshold. You don’t even need an oil change. Your tires are fine. Your car insurance company is even sending you checks!

• Recreational shopping. Did you used to cruise the luxury mall on weekends? They are likely still closed to the public. No spending there.

• Entertaining at home. There haven’t been any indoor dinner parties at your house for months. You are doing some entertaining outside, but maybe only one couple at a time. Lots of money saved here.

• Weddings. If you are the parents, you aren’t having them for the foreseeable future. If you would be an invited guest, you haven’t been buying presents.

• Graduation parties. There were few this season. It wasn’t the prudent thing to do. If your child graduated, it was likely a very small affair. More money saved.

Yes, this isn’t the whole story. You are spending more on groceries. Maybe takeout. Your wine and liquor bill is likely higher. The savings should far outweigh the added expenditure. One look at your credit card bill should make the point. Clients may want to ask themselves if they have been learning any good habits. Less spending means money that can be put to better uses.

Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book, Captivating the Wealthy Investor can be found on Amazon.