Saturday, December 4, 2021

“Crisis Opens Up”: Pandemic Has Changed How These Women Prefer To Spend Their Money

Caroline Chang learned something during the pandemic: before the spread of COVID-19 changed her lifestyle, she spent a lot of money paying for on-call services, visiting new bars with friends and buying drinks. But over the past 18 months, Chang, a 29-year-old user experience designer from Los Angeles, has found that she, her friends, and her boyfriend don’t actually need to go to a bar or club every weekend to make themselves happy.

“Living in Los Angeles, you can go out and spend money on a lot of alcohol-related things. So I would say that spending on booze and alcohol has dropped very, very much because of the pandemic, ”she said.

Chang found that her friends were just as fun visiting each other, cooking, chatting and playing board games. Chang and her boyfriend Nick Colt took a 30-60 minute walk every day in the midst of the pandemic, she said. Despite the fact that more establishments opened and the number of coronavirus cases declined, they continued their walks.

“There has been a shift in the circle of my closest friends in what we think is important to do and what it means to have a good time,” she said. “It feels like we left behind a lot of things that we held dear before the pandemic.”

Living in a pandemic has forced many millennial women like Chang to reconsider how they spend and save their money. They find that while they can now have access to pretty much everything they could, before March 2020, when many of the household orders went into effect, they can refuse – and even choose to skip – things and experiences that they once bought.

Financial experts also noticed the deliberate alignment of spending and savings with values ​​during the pandemic.

“Crises open up, right?” said Sarah Newcomb, director of behavioral science at Morningstar, a financial services firm. “And during this crisis, because it was collective, many of us were deeply relieved to have our own priorities revealed.”

Newcomb said the pandemic disrupted habits and daily routines, and people had to adjust to new routines: working from home, looking for a better career, quitting childcare, getting extra work, buying a single-family home. … Others are grappling with devastating job losses and evictions as the pandemic has disproportionately hit economic prospects, in particular women of color.

Women were already at financial risk before the pandemic, Newcomb said, because they make every dollar less than men and because they often need to devote time to caring for children and parents.

“You have an already vulnerable financial situation, exacerbated by the fact that additional unpaid work is expected if you have children or someone who needs care during the day, and we still have not returned to the workforce at pre-pandemic levels.” Newcombe said. “It’s the same with women: the slight weakness that may have existed before the pandemic has diminished.”

Michelle Smalenberger, chief executive of Financial Design Studio, an investment management and financial planning firm, said she noticed a shift towards savings during the pandemic. A report released in August by the U.S. Department of Commerce showed that retail spending fell 1.1% in July from the previous month, suggesting that the spread of the delta option has forced people to cut their spending (although retail spending has recovered. by 15.8% compared to July 2020, when a number of enterprises did not work yet).

For a millennial mom like Shahnaz Kelleher, the pandemic has forced her to end her tumultuous activities for her children. Before the pandemic, when her husband commuted to work every week, 40-year-old Kelleher, a housewife, involved herself and her children in sports and activities to keep everyone busy.

“I spent a lot of money on events for myself,” said Kelleher, who lives in Deer Park, Illinois. “It was my tennis, classes for children. We were all so busy and scattered, and then everything stopped. “

During the hiatus with the pandemic, instead of spending money on takeaways and children’s activities, Kelleher and her husband built a zipliner in their backyard. They cooked. They invested in home workouts instead of spending over $ 1,000 a month on tennis clubs, she said.

“My priorities changed and it was one of those things where we looked at everything and then you had to make a very conscious decision and think, ‘Is this worth what I want to put into it? “” Kelleher said. “And so when everything reopened, not everything really needed to be added.”

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The pandemic has shown who has reached a certain level of financial stability and who has not, Newcomb said. For women who have experienced falling incomes, the pandemic has thrown them one financial stage: from wealth accumulation to stability, or from stability to survival mode, or from survival to chaos.

The end of additional federal unemployment benefits and incentive checks, the end of the eviction moratorium and the forthcoming unfreezing of federal student loan interest are also creating enormous financial strains.

“When these programs stop and all of a sudden all the debts and interest on those payments are still payable, just because the world is in a pandemic, that doesn’t mean the financial system has stopped,” Newcomb said. “Your debtors still want their money, and your landlord still wants their money, and the utilities still want their money. So, if the money doesn’t come, you are stuck. This will send many people who were on the brink of the abyss. “

Women who do not have enough income to meet their needs will have to borrow and go into debt, she said, adding that the next option is to seek help from social services and non-profit organizations.

She added that once women are able to take positions in order to earn enough income and start paying off their debts, the focus should be on tightening budgets so that there are no reserves.

Due to the pandemic, Linda Naranjo, a single mother of four who lost her job as an accounting manager in the spring of 2020, has boosted her savings.

Naranjo, 40, who cares for her three children between the ages of 9 and 17 (her 19-year-old daughter lives alone), said she never wants to feel like she did when she pulled the last $ 150 from her savings again. last year’s bill to pay the electricity bill.

“It was terrible because I had no idea how I would pay rent next month,” said Naranjo, who lives in Phoenix. “What will happen to my children if I am thrown out of the place where we live? Will someone take my kids away from me? Who knows what will happen next? It was depressing. It was so overwhelming that I didn’t sleep, I didn’t eat. I was swallowed up by finances. “

By December, Naranjo had completely depleted her $ 5,000 in her savings account, and she knew that the $ 240 a week in government unemployment benefits she received would not cover her monthly rent and groceries. But she managed to find a temporary job at an accounting firm. And this spring I found a permanent accounting job in a construction company.

Instead of saving 3% of her earnings, she now has an app that automatically removes 25% of her salary and invests it in savings, she said. Gradually, her savings account approaches $ 5,000 again, but eventually she wants to triple that amount.

“The only thing I keep telling myself is, ‘I’ll never be where I used to be,’” she said. “I will do whatever I need to make sure I never go back there.”

The pandemic has revealed other values ​​to women. Smalenberger noted that the pandemic also led to an increase in donations for some, especially when incentive checks ended.

For Chang, the national settlement with race caused by the murders of Breonna Taylor and George Floyd during the pandemic prompted her to provide financial support. Chang said she was uncomfortable marching in protests due to the coronavirus, but she began donating $ 25 a month to a non-profit organization dedicated to ending racism and police violence.

“This is the first time I’ve really felt the urge to take action,” she said, adding that “something inside of me was like, ‘Enough, enough.’ Something needs to be changed. ” And best of all, I felt that I could appear at that moment through monthly donations. “

For Chang, the pandemic has not only expanded her philanthropy and social awareness, but has also allowed for increased introspection.

“I realized how not really wanting anything other than what I had,” she said. “When you take it all – communication, work or travel – you just stay with yourself. For me, it was one of the biggest benefits of being forced to stay at home and being forced to see things a little differently. “

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