How Americans Have Cut Back on Their Spending During the Covid-19 Pandemic
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Spending Habits During The COVID-19 Pandemic
A digital product consultancy named Highland recently surveyed 2,000 Americans to get a better understanding of their spending habits and personal finances during the COVID-19 pandemic. Let’s take a look at what they found.
Of they people they surveyed they found that 63% have cut back in spending during the pandemic. 21% have reported actually spending more during the pandemic and another 16% said they reported no change in their spending habits during the pandemic. When look at demographics, it looks like all generations are currently cutting back on spending equally with a similar breakdown between males and females.
What are the top reasons for cutting back on spending during the pandemic? Highland found that 60% of surveyed respondents said the main reason for cutting back on their spending was to simply be more cautious with their money. 49% of Americans said they were cutting back their spending because of a reduced income or salary at their job. 40% reported staying home more often so they didn’t need to spend as much as they would before the pandemic. The other main reasons for cutting back were because people either lost their job or a family member or spouse lost their job.
Places Americans Are Spending More
There are some people who have found themselves actually spending more than they would during the pandemic. For those people, Highland wanted to find out why the were spending more money.
Listed below are the top reasons:
- Buying more food or groceries (51%)
- Buying more household supplies (50%)
- Started new hobby (37%)
- Home improvements/renovations (36%)
- Retail Therapy (33%)
Places Americans Are Spending Less
The next part of the analysis looked at where Americans have specifically cut back on spending.
Listed below are the top areas where Americans have cut back during the pandemic:
- Dining out/takeout (64%)
- Entertainment (61%)
- Apparel (55%)
- Travel (52%)
- Transportation (49%)
- Recreation (43%)
- Haircuts (37%)
- Gym memberships (30%)
- Groceries (30%)
- Cosmetics (29%)
- Subscription services (28%)
- expenses (17%)
- Emergency savings (16%)
The survey from Highland also found that an alarming number of Americans reported living paycheck to paycheck during the pandemic. 63% of Americans reported living paycheck to paycheck which is up 10% from the start of the pandemic. Because of this over a third of Americans have opened up a new credit card since the pandemic to help with expenses. As a result of this 27% of surveyed respondents said they have accumulated over $10,000 in new debt during the pandemic.
Obviously, there is a lot of troublesome news to unpack in regard to savings and spending during the pandemic. One positive note to come from this is that 78% of Americans say that the pandemic has made them think differently about budgeting and saving moving forward.
The full analysis from Highland can be seen in the graphic below.