Monday, 22 July, 2024

COVID is Forever Changing how Americans Budget

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Six in ten Americans have reported that the COVID-19 pandemic year has permanently changed their spending and shopping habits, according to a new survey commissioned by Slickdeals, the leading social shopping platform.

The survey of 2,000 general population Americans examined pandemic-era spending and saving trends and revealed that 2020 has forever affected how 60% of people budget and spend their money.

The study found that over the course of the pandemic year, consumers spent much less money on things like movies (49%), luxury goods (46%), video games (42%), clothes (42%) and entertainment (41%). However, Americans increased their spending on groceries (41%), self-care products (23%), bills (22%), takeout (22%) and healthcare (20%).

Nearly half (49%) said they were panic-buying essential goods at the beginning of the pandemic. At that time, the most panic-bought items included toilet paper (50%), cleaning supplies (42%), hand sanitizer (41%), water (41%) and paper towels (40%). One year later, these habits have calmed down, but 14% of people report continuing to panic-buy. People are still purchasing essential items more than they did prior to the start of the pandemic.

More than half (58%) of people said they reallocated their “going out” budget for staying in, with 41% of people spending more money on redecorating their home. 73% of these nesters feel more pride in their homes since they began investing more time and money.

“Our internal data supports what consumers are reporting in this survey when it comes to their spending over the course of the pandemic year,” said Ryan Tronier, senior personal finance editor for Slickdeals. “We’ve found search volume on our site continues to remain high in the categories of home improvement and home office; and while there’s been a decline since the height of pandemic for searches related to essential items, terms like toilet paper continue to be popular with our users.”

However, not all spending changes were a choice or simple reallocation of budget. Two out of five Americans said they had a “significant” financial setback or loss in 2020. For 75% of them, their money problems made them reevaluate their long-term budgets.

In addition to budget cuts, 43% of people had to deal with unexpected expenses within the past year, including new bills (31%), new savings costs (22%), clothes (22%) and groceries (19%). Also frequently mentioned were funerals, medicine, and health expenses.

More than two-thirds (67%) of respondents said they received a stimulus check within the past year. For most, their stimulus money was spent on the necessities like bills (58%), groceries (34%), and savings (29%).

American spending habits also point towards hunting for the perfect deal. Over half (54%) would be willing to spend more than their budget would allow if the item they want is on sale. Nearly as many (52%) are willing to buy things in bulk if they’re on sale. Eight in ten Americans are more likely to buy essential items on sale than non-essential items and luxuries.

When the paycheck comes in, 69% of Americans will first tackle their bills. After that, however, they will go shopping for groceries (54%), spend money on transportation expenses (31%), clothes (25%), medications (21%), and their pets (21%).

Tronier added, “The study showed that the past year has significantly impacted how a majority of Americans spend their money. However, while budget priorities have changed, our Slickdeals community of savvy shoppers has consistently helped one another discover the best products at the best prices, from toilet paper to technology.”

Edited by Maryssa Gordon, Senior Editor, Price of Business Digital Network

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