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Did COVID cause you to spend your savings? How to get it back.

It's not a quick fix, but you have to start somewhere. Experts from Northwestern Mutual have ideas to get you started.

GREENSBORO, N.C. — Have you had to break into the piggy bank to cover living expenses during COVID-life? You're not alone. A study by Northwestern Mutual found 38% of Americans have dipped into some sort of savings. For example:  

19% have dipped into personal savings or emergency funds

13% have borrowed money from family or friends

9% have dipped into retirement savings like a 401k or IRA

 How do we get back on track? You want to treat your savings like a bill.

“You hear the saying all the time, pay yourself first. If all you can do is $5, then do five dollars. But you have to start from somewhere,” said Northwestern Mutual’s Terrance Floyd.

Floyd says the key to actually saving that $5 or $50 or $150 every paycheck is to automate the savings. Set up your direct deposit each month to have a certain amount go to your savings account. Don't even give yourself the option of not moving it out of your checking account to your savings.

The next free piece of financial advice is to make out a budget. Really. It's old school, but it works. Northwestern Mutual has 6 steps to creating a budget.

“You want to have a budget because you want to tell your money where to go versus asking questions of where has your money been? Your budget gives you freedom. It's going to be difficult at first, you're not going to get it right for the first month, the second month, third month, but it just takes practice,” said Floyd.

When you think of the budget you think of bills like your rent, car payment, utilities, and your paycheck. It's more than that.
 

One of the budget pitfalls is forgetting those non-monthly costs like yearly insurance premiums, auto registration fees, oil changes, shots for your pet.

Then there's the countdown to Christmas. You will buy presents. You will buy decorations. You will need to put that in the budget too so you have the freedom of spending how you want versus paying for something unplanned.