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How will spending habits change post-COVID?

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    How will spending habits change post-COVID?

    I'm seeing more and more people on social media (not financial sites) post about how much more money they have in their accounts due to the self-quarantining. I have no doubt that after this is all over, most folks will go right back to their old habits. But I'm starting to wonder if there will be at least a small group for whom this really serves as a wake up call. They'll finally realize how much they've been blowing eating out, buying coffee on the way to work each morning, going out for drinks after work, doing "recreational" shopping on the weekend, and just generally spending money for no good reason.

    The longer this "new normal" persists, the greater the likelihood of it sticking to some extent. Again, not for everyone, but very possibly for some.

    Do you think that's true or am I being overly optimistic?
    Steve

    * Despite the high cost of living, it remains very popular.
    * Why should I pay for my daughter's education when she already knows everything?
    * There are no shortcuts to anywhere worth going.

    #2
    as with every recession, minority change, majority go back to old ways. This one is different because it's 2 stages. once the pandemic fears subside, you still have a real recession that's likely to drag on and suck those few thousands people managed to save up dry.

    Comment


      #3
      Agreed, though not surprised. That happens every time we have a downturn. A small group realize the errors of their ways, and are forever changed. You just don't notice it because just as many or more people also coming of age to adulthood & are too ignorant to make decent choices about their money.

      Will there be a significant tide change as a result of this? I doubt it. The country's savings rate might tick up a few fractional points, and perhaps overall consumer debt loads will be moderated for a little while. But marketers are very good at their jobs, and Americans quite poor at impulse control.
      "Praestantia per minutus" ... "Acta non verba"

      Comment


        #4
        Originally posted by ~bs View Post
        as with every recession, minority change, majority go back to old ways. This one is different because it's 2 stages. once the pandemic fears subside, you still have a real recession that's likely to drag on and suck those few thousands people managed to save up dry.
        I think this situation is very different than previous examples. Never before has anything like this happened where everyone was stuck at home and virtually all businesses were shut down for weeks on end. People's entire daily routines and lifestyles have been totally disrupted. People have been forced to stop spending money the way they usually do. As a result, many are starting to recognize how much more money they have (assuming they still have paychecks coming in).

        Our average CC spending so far in 2020 is $1,500/month less than in 2019. That's pretty significant and a lot of people are finding something similar. They're getting along just fine and spending a lot less money in the process.

        I'm sure there will be a lot of pent up spending when this is all over, but just maybe, some people will give a little extra thought to where their money is going.
        Steve

        * Despite the high cost of living, it remains very popular.
        * Why should I pay for my daughter's education when she already knows everything?
        * There are no shortcuts to anywhere worth going.

        Comment


          #5
          Originally posted by disneysteve View Post

          I think this situation is very different than previous examples. Never before has anything like this happened where everyone was stuck at home and virtually all businesses were shut down for weeks on end. People's entire daily routines and lifestyles have been totally disrupted. People have been forced to stop spending money the way they usually do. As a result, many are starting to recognize how much more money they have (assuming they still have paychecks coming in).

          Our average CC spending so far in 2020 is $1,500/month less than in 2019. That's pretty significant and a lot of people are finding something similar. They're getting along just fine and spending a lot less money in the process.

          I'm sure there will be a lot of pent up spending when this is all over, but just maybe, some people will give a little extra thought to where their money is going.
          I really hope youre right and this isn't just temporary and people won't blow their forced savings on idiotic things (or have to blow it on necessities). Despite the hard conditions, there is opportunity for people to dig themselves out of their financial holes. Lots of federal stimulus, unemployment benefits, mortgage and student loan forbearance, etc etc.

          Comment


            #6
            Originally posted by ~bs View Post

            I really hope youre right and this isn't just temporary and people won't blow their forced savings on idiotic things (or have to blow it on necessities). Despite the hard conditions, there is opportunity for people to dig themselves out of their financial holes. Lots of federal stimulus, unemployment benefits, mortgage and student loan forbearance, etc etc.
            I'm not naive. I don't think a lot of people will change but I do think some will.
            Steve

            * Despite the high cost of living, it remains very popular.
            * Why should I pay for my daughter's education when she already knows everything?
            * There are no shortcuts to anywhere worth going.

            Comment


              #7
              I'd say most will go right back to their old habits assuming that they have a job after all of this.

              Maybe some folks who were thinking about doing debt repayment or starting up a Dave Ramsey plan will stick with it, since they were sort of just forced into not spending. Assuming that they weren't going hog wild on Amazon while on lock down.

              Brian

              Comment


                #8
                For the unemployed, I'd hope so. Employed, definitely agree spending habits won't change for the majority.
                "I'd buy that for a dollar!"

                Comment


                  #9
                  People have short memories and will go back to theie old ways once the pandemic passes unless they've had a major "come to Jesus" moment. Unlikely, but possible.

                  Comment


                    #10
                    There will also be a significant portion of the population who will have to live austerely because they won't have jobs. It appears another 6.6 million unemployment.
                    LivingAlmostLarge Blog

                    Comment


                      #11
                      Originally posted by LivingAlmostLarge View Post
                      There will also be a significant portion of the population who will have to live austerely because they won't have jobs. It appears another 6.6 million unemployment.

                      Official job loss is not where near these numbers (it's about 1/14th these total unemployment application numbers). These are people who filed for unemployment due to furloughs which just means you are no long being paid to stay at home but are now eligible to file for unemployment, but you are still officially employed.

                      Comment


                        #12
                        There are many people who are just taught not to save because they don't see a point in it. In fact they see you savers living your life wrong. This one pharmacist I work with said "money comes, money goes..but it's the experiences you cherish the most". The "things will eventually work itself out" mantra is real for many people. It's almost like these people live their lives half drunk(probably are since they spend a third of their pay drinking at a bar).

                        The concept of you make X amount of money, you spend it on Y, if they cancel each other out then great. If you go into the negatives than you'll try again next month. Going into the positive just means you F-ed up..you didn't live to the fullest.

                        And now when S hits the fan, we have all of them coming out complaining how they can't pay rent next month and that the government should stop bailing out their employers..lol.

                        Comment


                          #13
                          I predict that there will be a baby boom ~8-10 months from now, leading to an uptick in spending. Sectors most affected will include real estate, baby items, grocery, medical, pharmacy, and alcohol (for the dads out there).
                          "Praestantia per minutus" ... "Acta non verba"

                          Comment


                            #14
                            Originally posted by Singuy View Post


                            Official job loss is not where near these numbers (it's about 1/14th these total unemployment application numbers). These are people who filed for unemployment due to furloughs which just means you are no long being paid to stay at home but are now eligible to file for unemployment, but you are still officially employed.
                            You really think job loss is 1/14 of the unemployment claims? I don't think it's 1/14. I think it's straight out lay offs so they don't have to pay benefits. Companies must also consider they can easily rehire people after the job loss.
                            LivingAlmostLarge Blog

                            Comment


                              #15
                              Originally posted by Singuy View Post


                              Official job loss is not where near these numbers (it's about 1/14th these total unemployment application numbers). These are people who filed for unemployment due to furloughs which just means you are no long being paid to stay at home but are now eligible to file for unemployment, but you are still officially employed.
                              I don't know about 1/14 but you're absolutely right about the number not being accurate. Millions of the workers who have filed will be back as soon as the businesses are able to reopen. Many major companies have furloughed or laid off their entire staff, sometimes thousands or even tens of thousands of people from a single company.

                              There are going to be jobs that don't come back but it's not going to be nearly the 14 million that have already filed for unemployment.
                              Steve

                              * Despite the high cost of living, it remains very popular.
                              * Why should I pay for my daughter's education when she already knows everything?
                              * There are no shortcuts to anywhere worth going.

                              Comment

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