How has COVID-19 changed our mindset about money? A recent study by Personal Capital compares survey responses from late February to how the answers to the same questions changed just four months later.

Overall, Americans appear to be revising their ideas of wealth and comfort. Prior to the pandemic, most respondents agreed that an annual salary of $70k and a $40k savings account was comfortable. Now, those numbers have dropped to a $60k annual salary and a $25k savings account—a 37% drop.



Fewer than half the respondents reported that they currently feel financially comfortable, while 1 in 4 say they are experiencing financial discomfort. Fifty-one percent said they became more financially responsible since the beginning of the pandemic, with 26% starting to track their expenses. “Many people, especially Millennials, may feel a need to live and spend more cautiously after another economic setback like this,” says Paul Deer, Director of Advisory Services for Personal Capital.

Fifty-five percent purchased stock when prices plummeted. Since the onset of the pandemic, 40% of Americans report checking the markets more frequently, with as many as 32% checking it daily. Just 11% weren’t looking at all.

Millennials and money

In general, Millennials are the most likely generation to be more aggressive in their investing strategies, perhaps because of the stress of their debt burden. True to form, they were the most likely generation (29%) to invest more than they otherwise had planned following the pandemic.

“Millennials are getting hit again after a rough go with the previous financial crisis and are trying to avert the worst effects,” says Deer. However, not all Millennials chose the aggressive route. Twenty-nine percent said they didn’t change their investing strategy, while another 28% reported investing more conservatively. (14% have no investing strategy.) “In general, Millennials tend to be better savers,” says Deer.

Aside from playing the market to avert boredom, responding with an aggressive investment strategy to the financial upheaval of coronavirus may be helping Millennials feel more in control. It’s a feeling that many don’t want to give up: 22% said they will continue their aggressive investing strategies even once the economy recovers. On the other hand, another 15% said they would be more conservative.

All generations are looking forward to treating themselves once the economy rebounds, with vacation/travel, dining out, self-care and hobbies topping the list. Just 19% of respondents said they didn’t plan to spend any extra on discretionary purchases once the economy is back on its feet.

A word of advice

Deer has some advice for his fellow Millennials. “This pandemic has been a clear example of why an emergency fund is a must-have, especially at an early stage in life,” he says. “Life surprises, both in good, and bad ways.”

To create this rainy-day emergency fund, young people need to set a target amount and make sacrifices to cut back on their expenses wherever possible. “Learning to do this now, at a time that is still early in one’s career, is a valuable habit,” advises Deer. “This caution could help pay long-term dividends for Millennials with regard to their overall financial trajectory.”

Of course, hindsight is 2020 (on more than one level). “Living leaner in future doesn’t change the difficulty of the situation for many today, but it is a ray of light to look towards when the pandemic passes.”

How low can you go?

Four months and a global pandemic later, a lot has changed in the American mindset regarding wealth and financial comfort. While the markets are showing signs of life, many are still lowering their standards for a financially comfortable future. It remains to be seen how much further people from all generations will revise their version of the American Dream—and what this will mean for employment, money habits, and quality of life.

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Sean McClay
Founder / Chief Investment Officer
STM Asset Management
Office : 251-533-6521