Professor offers tips to save money during challenging times
Amitabh Dutta is a professor at Florida Tech.
We’ve all likely saved money in some form or fashion due to the COVID-19 outbreak. We’ve generally driven less. Many forms of entertainment have been halted. Flights have been curtailed if not stopped completely in many forms. There are no movie theaters to patronize. The list is seemingly endless.
So how do we continue to save at least some of that money as economies gradually re-open?
Amitabh Dutta, an associate professor of finance at Florida Tech, said there are several ways people can make good economic decisions.
“It’s not a one size fits all prescription in this crisis, I think, because you see different levels of disposable income will have different worries,” Dutta said.
There are some common sense ways that people can save. For instance, Dutta said instead of paying for his own basic Netflix subscription, he’s now one of those with legal access to a family member’s plan.
It’s also important not to waste when possible, according to Dutta, who uses the example that he’s buying “less fresh veggies and I’m buying frozen.”
“If you see Food Network, they’ll say, frozen vegetables can never be as good. But you know what, when you’re cooking them they’re just as good,” Dutta said.
Long-term payments also should be looked at, according to Dutta.
“Shop around and look for things that you have not re-financed or re-priced in this marketplace. Any big thing that you’ve locked into, like (an) installment payment like your home mortgage, this is a good time for you to re-finance because interest rates are down,” Dutta said.
He also urged people to look for deals with respect to insurance. He used an example of a car insurance company he uses that has given a discount back to consumers due to the fact people are driving less.
“If your insurance company has not given you this kind of deal, shop around and look for someone that’s going to give you a better deal,” Dutta said.
Dutta also noted that it could be advantageous for consumers to wait for a bit to make big purchases, such as those involving homes or vehicles.
“When there is excess supply, and there’s a shrinkage of the demand even for new cars, you’ll get better deals six months from now,” said Dutta with respect to consumers potentially purchasing a vehicle.
Dutta also noted that it could take a couple of quarters for prices and the inventory to catch up with the slowdown in demand overall in the economy, so there could be deals in other areas as that manifests itself.
The stock market is one place that Dutta advises is a good place for people to spend their money.
“If you have some money now and you don’t need it in the near future, look for strong fundamentals that will retain their value in the long term,” Dutta said.
People love to take vacations during summer months, but Dutta asked people to consider staying closer to home for those trips.
“I would say explore one of the things that you have not been to in the vicinity. Like maybe a 50-mile radius, and you’ll be surprised to find that there are things that we sometimes overlook, which we think ‘you know what, it’s there in my backyard, I can go anytime and sometimes it ends up you don’t go at all,’ ” Dutta said.
Dutta said there are many other methods of saving.
“If you take care of the pennies, the dollars will take care of themselves,” Dutta added.
In general though, he also offered a bit of positivity to what is obviously a very difficult economic time.
“It goes back to the idea that every cloud has a silver lining, to use cliches,” Dutta said. “Because the silver lining will be you’re being forced to be more prudent.”