Money in the kick

If there’s any ‘good’ news from this pandemic, it may be the massive sums of money we have stashed away while unable to blow them on travel, dining out and other delights.

It all adds up to $140 billion or about 10% of annual household income, so when the worst is over, on what would you spend the money?

Assuming you are lucky enough to be a beneficiary of these savings, three classical economic options are open to you.

Simply you can spend it on consumption, save it, and reduce debt, such as in a mortgage offset account, or invest it by buying shares or property.

The first indulgence many of us think of is travel, especially after so many months of closed borders and lockdowns. But the world of free-wheeling tourism we encounter could not be the same as before.

The option of cruising around Australia might not be so cheap nor easy.  Airlines have lost plenty, and competition is down, so we might expect fares to go up. Demand for domestic travel is already high, and accommodation is reportedly short in many destinations.

Car hire now costs a bomb, and demand for camper vans, caravans and 4WDs is so high it may mean the great open road will not be quite as empty as before.

In international terms, the same applies to airlines and accommodation. Higher demand with lower supply could mean costs could be higher, perhaps much higher. Forget all the disruption and doubts caused by restrictions as the costs might outweigh the benefits.

A new car or even a good second hand one? There’s not many on the market for various reasons such as COVID disturbances to production, a worldwide shortage of computer chips and again, much higher than usual demand.

So you can save it or invest it even if you find it more ‘expensive’ to actually spend some of it. I hope I am wrong, and many forecasts and media reports turn out to be just that; however, some change is inevitable.

I’ve been buying some better camping gear ahead of a big trip who knows where and who knows when.  If you have some enforced savings, how, if at all, will you spend them?


Any information contained in this communication is general advice, it does not take into account your individual circumstances, objectives, financial situation or needs.