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Sustainability & Adapting to a Post-COVID-19 Economy

Consumerism negatively impacts the environment but also the lives of many. Household debt rose to $601 billion in 2019, the highest in 12 years. The COVID-19 pandemic may have had a positive side to it; as people sheltered at home, many learned how to go without many of their perceived necessities and items they used to spend money on.

These newly-adopted habits could have long-lasting consequences for the economy. Consumers affected by the market instability leading to job losses or who were scaled back may have learned first-hand the importance of saving money. Living a more sustainable lifestyle that's less reliant on consumption and debt could be a lifesaver during a time of crisis.

Let's take a closer look at how the term "sustainability" may have new meaning in the whole new world of the post-COVID-19 economy. Sustainability may no longer simply refer to how our decisions can impact the environment, but it could also include how our actions affect our budgets and the economy at large.
Personal Debt
One of the most important lessons for many during the COVID-19 pandemic is how their previous lifestyles may no longer be sustainable. Living from paycheck to paycheck and incurring growing debt can lead to a catastrophic situation if something unexpected happens.

In most cases, getting laid off or diagnosed with an illness when individuals don't have an emergency savings fund can impact their finances for years to come. Larger events such as a natural disaster or a pandemic can intensify the situation. Relying on government bailouts to weather a crisis is simply putting a band-aid on a cut that needs stitches.

Learning to budget to ensure that people spend less than they make is essential. People need to take charge of their spending to stabilize their personal finances, especially during challenging times. Paying down debt such as high-interest credit card debt and student loans must be a priority. Banks and corporations profit on the backs of citizens who carry large debt and struggle to pay it off.

Student debt, particularly, should be addressed and paid off as soon as possible. The country currently has $1.5 trillion in outstanding student loans eating up a large portion of many individual's incomes, and if those consumers' financial situations change for the worse, it's difficult to have student loan debt discharged in bankruptcy.
Sustainability and Savings
Most people enter into the sustainability journey to reduce their negative impact on the eco-system, but in doing so, they realize they also save money. For example, trading in an SUV for a hybrid vehicle reduces people's carbon footprints, but it also saves them money at the gas pump. They can also take it one step further and purchase a pre-owned vehicle. By doing this, people avoid the financial loss they take when they buy a new car and drive it off the lot.

The benefits of driving an electric vehicle or hybrid are obvious. The fuel savings is probably the top reward. In some states, hybrid and electric vehicles can travel in the high occupancy vehicle lanes, regardless of the number of passengers. In addition, the lower reliance on fossil fuels means owners are reducing their carbon footprint.

For individuals who cannot pay cash for one, a side gig could help pay the auto loan off faster. Some of the most popular side gigs right now are food app delivery drivers. Working with Instacart or Uber Eats on the weekends or evenings to deliver meals and groceries to customers could be profitable. In addition, electric or hybrid vehicles don't require as much gas, so the individual can keep more of the profits from a side hustle.

A hybrid or electric vehicle is one of many examples in which living an environmentally-friendly lifestyle and saving money go hand in hand. The same applies to converting a home to solar power or creating a sustainable, organic food garden.
Remote Work

The world is working from home in record numbers. The situation was forced upon many due to the COVID-19 shelter at home mandates. But working from home highlighted benefits people may not have been aware of before: air quality improved as factories shut down and fewer people commuted each day to a work location.

Scientists warn air pollution will rise again as COVID-19 restrictions ease, but many people and businesses may opt to continue working remotely in a post-COVID world. For those having to return to the workplace, working remotely from home once per week can reduce their contribution to air pollution and global warming. In addition, remote work is good for the budget. People can save on the transportation and parking costs associated with commuting to work every day.

Occasionally, choosing an alternate way to get to work, such as walking or riding a bicycle, will also save people money and reduce their carbon footprint -- a win-win for spending reduction and the environment.
Sustainability as a Political Movement
Many Americans are trapped in a vicious cycle of consumerism which leads to debt, poverty, and reliance on government help. Choosing to make more sustainable choices could save them money while supporting environmentally-friendly companies and products.

Making more informed choices on how and where to spend one's hard-earned money can bolster the right kind of economic growth, one that relies less on Wall Street and Washington. Individuals in a post-COVID-19 world may finally get out of the mindset that carrying large amounts of debt to buy more is "normal."

Posted by Magnolia at June 9, 2020 4:40 PM
Comments
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