The COVID-19 pandemic changed the way everyone lives, works and spends. As the virus spread, social distancing became the new normal, and many people found that they began directing their money towards different things.
The personal savings rate among Americans reached 32.2% in April, which was shortly after strict lockdowns went into effect around the country. This surge in savings is likely correlated with the 12.6% drop in consumer spending brought on by company shutdowns.
When the pandemic ends, many people will return to their previous ways of life. However, some spending habits that arose out of necessity during the pandemic might be worth keeping post-COVID.
Throughout the pandemic, most states required that restaurants transition to take-out only or at least significantly limited their capacity for an extended period of time. This resulted in many consumers eating at home more, either by ordering in or cooking.
In fact, 55% of consumers began eating at home more during the pandemic, and 35% reported gaining a newfound passion for cooking. When people limit the amount that they eat out, they save money, especially if they typically order alcoholic beverages when they go out to eat. By continuing this trend of eating at home more often, Americans can save money.
One thing that Americans began spending more money on at the start of the pandemic was bicycles — so much so that many bike manufacturers are still experiencing shortages. In April, cycling industry sales skyrocketed 75% as bikes and associated equipment flew out of stores.
The great thing about owning a bike is that, aside from occasional maintenance costs, it's a one-time expense that provides a lot of bang for your buck. People began buying bikes for several reasons, but they all involved saving money.
For example, some shoppers bought bikes to get exercise while gyms are closed, while others bought them to avoid taking public transportation or ride shares during the pandemic. Either way, bicycles provide a cheap way to both exercise and get around, and consumers can save money by transitioning to biking to fulfill those needs.
Americans whose favorite pastimes before COVID were dining out, shopping in stores or going to the movie theater had to find alternative ways to entertain themselves while lockdowns were in place.
For many people, this involved creative projects of all kinds, like knitting, scrapbooking, painting and more, which has created an increase in demand for craft supplies. Throughout the pandemic, people have had to learn how to be happy in isolation, and it is creating less of a need to be constantly out spending money.
By limiting the amount they go out and increasing the amount of time they spend on their personal hobbies, Americans can continue to save money post-COVID.
At The Federal Savings Bank, we believe that everyone can save money for their future with the right strategies, tools and resources. We want to help you make the best financial decisions for you and your family.
To learn more strategies for saving money, contact us today.