Seven in 10 (70%) millennials and Gen Zers said COVID-19, specifically, made them realize they needed to reset and reevaluate how they handle their money, according to new research.
The study asked 1,000 Gen Z Americans and 1,000 American millennials about the impact of the COVID-19 pandemic and 2020 as a whole on their personal finances.
Over half (52%) of respondents said they wish they did a better job handling their money during the pandemic.
In a show of generational difference, millennials were more likely than their Gen Z counterparts to feel like they handled their money poorly, at 59% compared to 46%.
Conducted by OnePoll on behalf of Laurel Road, a digital lending platform, respondents reflected on the pandemic and noted the top reasons for a financial reset included new personal goals (33%), changes to their personal life (32%), and new financial goals (30%).
Although nearly seven in 10 respondents shared they’ve effectively budgeted their money as best they could, given the circumstances of 2020 and quarantine, in particular, 60% also said they wish they could improve their budgeting skills, they just don’t know where to begin.
Thirty-seven percent of respondents said they made more of an effort to save more money when they could, with 33% creating a budget and 25% even speaking to a financial adviser about their situations.
A further 20% of those polled shared they refinanced their student loans, and 19% consolidated their student loans.
And for those polled with student loans (approximately 1,500 respondents), 62% said the federal student loan forbearance has made an impact on their ability to save money during the pandemic.
These quick adaptations during this uncertain time seemed to have paid off, as the average Gen Z respondent saved nearly $600 and the average millennial respondent saved just over $1,000, specifically during the pandemic.
“We know COVID-19 has been challenging for us all. For millennials and Gen Z-ers, they too have faced many challenges, but in turn, the pandemic has also prompted an opportunity for a financial reset,” said Alyssa Schaefer, Chief Experience Officer at Laurel Road.
“What’s encouraging to see from our survey results is that so many people have used this time to prioritize their personal finance, including by refinancing their student loans, and actively look to learn new ways to budget and save.”
Respondents also shared the top ways they’ve been investing in themselves during this uncertain time — with 32% putting money toward personal wellness and 25% investing in their professional development by getting certified in additional skills.
Encouragingly, a quarter (25%) of respondents also shared they’ve put more money toward mental health resources as well as attending webinars or online courses to progress their professional development (24%).
Student loans also play a big part in Gen Z and millennials’ financial wellness, as the survey found 62% of those surveyed with student loans shared that quarantine finally allowed them the time to think about their student loan financing options.
“Investing in personal well-being is always important and something we believe in strongly at Laurel Road,” Schaefer added. “Right now, it’s never been more crucial to focus on our ‘mental wealth’ — daily personal, professional and financial decisions that support our peace of mind.
“Making impactful changes to financial planning, such as student loan refinance, can create beneficial savings opportunities, and we’re proud to provide options that do this for our customers.”
Looking ahead to next year, one in five respondents shared that if they had an extra $1,000 to spend in 2021 — they’d use it to pay off more of their student loans.
Additionally, a quarter of respondents said they would invest in their personal wellness and even in the stock market.
TOP CHANGES TO PERSONAL FINANCE HABITS DURING COVID-19
- Made more of an effort to save money — 37%
- Created a budget — 33%
- Canceled subscription services they don’t frequently use — 31%
- Spoken to a financial advisor — 25%
- Refinanced their student loans — 20%
- Consolidated their student loans — 19%
TOP WAYS GEN Z AND MILLENNIALS SAVED MONEY DURING QUARANTINE
- Eating out at restaurants less frequently — 32%
- Not going to the movies — 30%
- Not buying new clothing/shoes — 26%
- Not going out to bars — 26%
- Canceling their gym membership — 18%
- Not wearing makeup — 18%
- Canceling a streaming service membership — 18%
- Canceling their cable service — 15%
- Buying less gas — 25%
- Not buying lunch every day — 25%
- Ordering less delivery/take out — 25%
- Not going to a salon for a service (i.e. nail salon, hair salon) — 24%
- Not seeing concerts/plays — 23%
- Not buying coffee/breakfast on the way to work — 23%
- Not having to commute (i.e. train tickets, tolls) — 22%
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