Millenials and Gen Zers Finances during COVID-19
Along with the rest of the population, Millenials and Gen Zers have been coping with the repercussions of the COVID-19 pandemic. For many, significant setbacks to employment and personal finances have been the norm. On the other hand, the virus has transformed some our youngest workers into unexpected savers.
Covid has affected both spending and saving
Restrictions in place to flatten the curve have in turn spawned a change in lifestyle, saving and spending habits for a large cohort of Millennials and Gen Zers. For instance, a recent Wells Fargo study uncovered that 17% of Gen Zers residing in the United States have changed their living situation since the outbreak of COVID-19. Furthermore, a Northwestern Mutual survey revealed that the savings rate among Americans has risen this year, hitting a record high of 33.7% in April, and hovering around the 20% mark in recent months. According to the U.S. Bureau of Economic Analysis, the savings rate was closer to 7.5% pre-coronavirus.
Some are seeing changes to their financial values
Millennials and Gen Zers have been applying their newfound savings to a variety of arenas – opting to pay down credit card and student debt, build an emergency fund, invest for retirement, and even refinance their mortgages. Many are planning to continue trimming expenses that do not contribute to their health or happiness in a post-pandemic world. Some are even reporting a change in financial values, reevaluating what they consider essential more than ever before. Who and what truly matters? How does that impact my financial decisions? Where do I want to spend my money now? Coronavirus has amplified the velocity of change in almost every aspect of our lives, particularly with respect to our values and priorities.
An opportunity for some to gain a new perspective on their finances
With the reverberations of the pandemic serving as a wakeup call to what matters most, we encourage all investors, particularly Millenials and Gen Zers, to consider the habits they wish to keep in a post-COVID world. Those who are simply waiting for the crisis to pass, and to resume business as usual, may end up losing a rare opportunity to gain a new perspective on their finances, and ultimately improve their lives
If you and/or your children feel you may be better positioned to meet your goals in our “new normal”, and are curious about the steps you can take to get there, please do not hesitate to reach out to one of our Advisors.