Here’s a quick overview of what happened and how to apply it to your future financial decisions.
Covid-19 has reshaped the world in more ways than one, from how we greet our friends to how we work, so it shouldn’t come as a surprise that our spending habits have also changed.
Despite early proclamations that “we’re all in the same boat,” it’s become clear with time that the impact of the pandemic has varied widely between different groups—some people are the richest they’ve been, while others suffered unduly. But regardless of this inequality, it’s still possible to note a few general trends.We’ll be focusing on the United States here, but similar trends have taken place across the globe.
With the country shut at home and the usual entertainment options out of the question, one activity was particularly popular: sitting at home and eating. More than 100,000 eating and drinking establishments closed over 2020, and even when restaurants were open, many people preferred to stay at home to avoid infections. As a result, grocery shopping spending increased significantly, with food and beverage spending rising by 10%. Meanwhile, spending on leisure, tourism, and travel went down significantly.Now that the economy is beginning to open up again, spending has begun to recover. Some people might even be looking forward to a splurge.Still, that doesn’t mean that we’re buying the same things as before. Since online shopping has well and truly taken hold, we have more options, and 80% of consumers are now considering buying directly from manufacturers to remove the middleman and save money.People are also becoming more socially conscious—more than two thirds of buyers said the pandemic made them more socially conscious, whether they’re supporting small businesses or environmentally friendly purchases.
Everyone knows that the pandemic has made technology and consumers closer than ever. As part of the efforts to avoid all physical contact, people have leaned into using digital payment methods over cash, taking us closer to a cashless society.In 2020, 136 million mobile money accounts were created, and the success of e-commerce (which necessitates online payments) is evident.Could this shape consumer behavior in other ways, such as encouraging people to move away from traditional financial institutions to digital investments or best compound interest investments? Time will tell.
The national savings rate increased to 27.6% in March 2021—and in April 2020, it went as high as 33%. A huge segment of the population stopped spending money on commuting, eating out, and entertainment, and the stimulus checks may have also played a role in the savings surge.However, this isn’t to say that everyone was able to stash money away. The pandemic severely interrupted the lives and businesses of many people, for whom the stimulus checks weren’t even enough to cover their expenses. Almost a third of Americans reported that their credit card debt increased due to the pandemic, demonstrating just how tough times got for many.
We love a nice bit of data as much as anyone, but we’re not just looking at spending habits for the sake of it. The events from the last few years can teach us plenty about how to borrow against bitcoin and invest money, so failing to learn from them would be a missed opportunity.
The idea of budgeting is nothing new, yet most people choose not to do it. Let the pandemic be a lesson that you never know when you could lose your job and the opportunity to find any other job in your sector—so make sure you’re consistently saving more than you spend.To make this easier, consider a money management app that automatically syncs with your accounts to track spending and help you meet your goals.
An emergency fund is a pot of money that meets two conditions: you can access it whenever you want, and it’s large enough to cover your expenses for at least a few months if “hard times” hit. Covid-19 has shown that nobody is safe from these hard times, no matter how stable your job appears.Even if you had an emergency fund at the start of the pandemic, that might no longer be the case—71% of Americans had one previously, but that number has now fallen to 44%. It’s time to build those savings up again! We recommend having enough easily accessible funds to cover your expenses for 6-12 months.
During Covid-19, some industries did amazingly, and others suffered significantly. Some stocks soared, and others plummeted. It just goes to show that you need to diversify your portfolio and update coins or holochain news to keep your money as safe as possible.When you’re deciding which products or assets to diversify your portfolio with, make sure you choose one option that lets you withdraw your money instantly—this will make the perfect place to store part of your emergency fund. For instance, at MyConstant p2p crypto lending, we offer instant withdrawals across all our investment products such as qtum coin.
Throughout this pandemic, we’ve seen some of the most extreme market conditions in a while. The S&P 500 fell by 33% between February 18 and March 23 2020—and since then, it’s grown by a huge 102%. That means that if you’d invested $1,000 at the all-time low in February, you’d have $2,020 now.Meanwhile, US inflation is at a 13-year high and interest rates are falling. As a result, any money you don’t invest is effectively losing its value, and you stand no chance of getting a good interest rate from the bankSo, in spite of what you might think, investing during coronavirus would have been incredibly profitable. It’s not too late to get started—wherever you’re at now, you can find a suitable investment strategy.
Although low interest rates mean you shouldn’t expect much from so-called high yield interest accounts, they imply one perk: debt is cheap now. That doesn’t mean you should get into debt, but it gives you a unique opportunity to refinance and tackle it once and for all.
Even if you weren’t among the numbers of people saving and investing during coronavirus, you can learn from what’s happened and turn your financial situation around and start to lend crypto.If you’re building your emergency fund and looking for somewhere safe to store your savings and earn a little interest, you can deposit money online with us and earn 4% APY. Or, if you’re prepared to take on some risk to diversify your portfolio, you can how to lend money legally to borrowers and earn up to 7% APR. This means you’ll be lending directly to people and businesses (who have put down collateral to make your investment safer).When you invest with us, you’ll also get:
Why not create your free account today and find out for yourself if we’re right for you?