While financial anxiety is high amid the coronavirus pandemic, the crisis may be inspiring long-term behavioral changes.
For some younger consumers, the pandemic and the economic fallout may be one of the most challenging periods they’ve faced. To gain more insight into the pandemic’s impact, Vacaville, Calif.-based Travis Credit Union surveyed millennials and Generation Z about their savings habits before and after the outbreak began.
Nearly 3 out of 4 (73%) said the COVID-19 crisis will impact the way they manage their money.
A bigger focus on saving
For many respondents, saving was a priority even before the pandemic. Respondents said they began saving, on average, when they were 19, and 52% said they add to their savings monthly. Breaking down how much they’ve accumulated, men averaged $16,631, while women averaged $11,649. The top things that respondents said they were saving for included:
- A home (30%)
- Retirement (26%)
- Other (15%)
- Travel (11%)
Only 40% of respondents have and regularly contribute to an emergency fund. Of those who do, here is what they said they’re preparing for:
- 33% cited potential job losses.
- 32% cited family emergencies.
- 27% cited medical emergencies.
- 8% cited major home or car repairs.
However, the crisis has caused some millennials and Gen Zers to reconsider their financial priorities. Of the 73% who said the pandemic will impact how they handle money moving forward:
- 45% said they’ll cut down on their spending and manage their money more closely.
- 43% said they’ll put aside more for general savings.
- 39% said they’ll establish an emergency fund.
- 28% said they’ll stash more money in retirement accounts, such as a 401(k).
The impact of the pandemic
One reason some respondents may be motivated to change their financial habits is because nearly 4 in 10 (39%) have had to tap their savings during the pandemic. With some consumers losing jobs during the COVID-19 crisis and others seeing reduced hours, a loss of income has fueled economic uncertainty in recent weeks.
Of those respondents who had to raid their savings accounts, most (70%) said they used their savings on food. Other expenses they spent their savings on included:
- Utilities (48%)
- Mortgage and rent (41%)
- Credit card debt (25%)
- Student loans (22%)
- Car payments (22%)
- Health care costs (19%)
Methodology: Travis Credit Union surveyed 1,879 consumers who identify as millennials or Generation Z. Travis Credit Union classifies millennials and Generation Z as those born between 1981 and 2012. The survey was taken May 18 to May 20, 2020.