COVID-19 Changed Millennials Spending Habits
Millennials have seen the 2008-2009 recession which is why they know how it feels like to be in a recession. That is why they are changing their spending habits and managing their finances smartly as compared to other generations during this pandemic. Millennials have cut down their spending and tighten their wallets.
Instead of spending money on luxurious items, they are preferring to save and invest in stock markets and other investments. With most Americans getting stimulus checks from governments, millennials are using this money for stock market investments and paying off their student loans. If you want to learn more about how coronavirus pandemic has changed millennials spending habits, then you are at the right place.
In this article, you will learn about seven ways in which COVID-19 has transformed millennials spending habits.
Prepare Themselves For A Recession
As mentioned before, millennials have seen a recession before. As a result, when they saw coronavirus getting out of hand, they realized that we might soon enter a recession. That is why they started preparing for a possible recession by cutting back on their expenses. According to a survey, 54% respondents admitted that coronavirus has impacted their purchase decisions and 40% millennials said that they are cutting their expenses so they can prepare themselves for a recession.
By cutting their expenses, they managed to save some money for the rainy day so they don’t have to go into debt in order to survive. That is why it is important for millennials to have an emergency fund, which can save them from going into debt during an emergency. Millennials should not only save, but they should also make sound investment decisions and look for ways to make money online. With the internet on their side, making money is now easier than ever before.
Using Delivery Apps
The same survey also suggests that 30% millennials are using apps and services. Contactless deliveries are growing in popularity as people are reluctant to take their products from the hands of the rider, whether it is food or gadgets. Riders are dropping the food items at the doorstep and moving away and customers can open the door and pick it up. Users can also specify the time they want their order to be dropped off. This trend of contactless deliveries will only grow and will not subside anytime soon even after this pandemic is over.
Taking Advantage of Lower Prices
When this pandemic started, most people started rescheduling, postponing and cancelling their trips but millennials on the other hand took full advantage of cheap airline tickets. Airline has dropped prices and started offering flexible policies and multiple locations and millennials realized that it is the best time to explore their favorite tourist destination as airline ticket prices are lower.
Ashley Henkel, a millennial, took multiple flights from New York City, Vancouver, Portland and Oregeon. Sharing her opinion, she said, “I feel like if the coronavirus would get even more serious and wipe out a large amount of people, I might as well be somewhere having fun”. Other millennials are also making the most of cheap prices and enjoying discounts on products. You will also see them using coupons and vouchers when they shop online.
Since we are on the topic of online shopping. Let’s discuss it. Instead of visiting a brick and mortar store near them, most millennials prefer to shop online. The number of visits to their nearest brick and mortar store has decreased and they are now shopping online. Whether they have to buy groceries or buy something else, they visit their favorite online store and order it from there. This has led to exponential growth of both small and large scale ecommerce businesses. Amazon and FreshDirect is the best example in this regard. Scott Crawford, Chief Merchandising Officer of FreshDirect highlighted a new trend when he said, “Our data leads us to believe customers are preparing more meals at home, and are consuming more fresh and organic food to stay healthy.”
According to a survey conducted by Crediful, millennials are more likely to spend their stimulus checks on paying off their student loans, housing and making stock marketing investments. This is a huge departure especially when you compare it with spending habits of other generations. For instance, Generation X will spend their money on paying utility bills, paying off credit card debt and hygiene and toiletries. This clearly shows that most millennials spend money on non discretionary expenses.
Seeking Help For Coronavirus Treatment
Did you know that half of the Americans can not afford to get sick with coronavirus? Atleast, that is what the poll conducted by Healthcare.com and YouGov suggest. Despite this, millennials are more concerned about coronavirus treatment expenses as compared to older generations.
More than one third of people aged 18-34 years are not confident that they can bear the expenses of coronavirus treatment. As a result, millennials are more likely to borrow money or tap into emergency funds if they already have one to cover up for coronavirus treatment expenses. You will also see them paying for medical bills through their credit cards. All this clearly shows that they are more willing to seek financial assistance to pay for their medical expenses.
Moving Their Money
Another survey conducted by Bankrate and YouGov shows that millennials are usually active investors and are more likely to make stock moves. The survey reveals that 24% of millennials have invested in the stock market despite the volatility of the stock market. Similarly, you will also find them moving and taking their money out of the stock market more often as compared to other generations. Millennials prefer short term investments with higher gains even if there is a higher risk involved as compared to long term safe investment options. They also contribute to mutual funds and individual stocks.
What impact did COVID-19 have on your spending habits? Let us know in the comments section below.