by Louise Nistler

Looking Long-Term: How COVID-19 Has Changed Saving Habits

A lot of people’s savings plans were among the things cancelled by COVID-19. Data analyst Louise Nistler looked at how her own Goals changed, and turned her curiosity to how Simple customers have also adjusted their saving habits. Here’s what she discovered about the Goals you’re saving toward now.
COVID-19 Spending Data

Last fall, my boyfriend and I decided to book a trip to Japan for spring of 2020. We got lucky and scored a great deal on tickets to travel in April—right when the cherry blossoms would be in bloom! We calculated the estimated cost of the trip and created a Goal to save up for our vacation over time. Each payday, money automatically moved into our Goal, and as we got closer and closer to saving the amount we needed, we excitedly planned all of the things we would do, see, and eat on our first international vacation together.

Fast forward to spring of 2020, and the world was in a very different place due to COVID-19. We never made it to Japan. The world as we knew it had changed, and our financial goals have had to change along with it. Instead of flying to a different continent, we’ve shifted our thinking to what we can do now to save for events in the future. We also allocated money to making our home more comfortable, since we’re both spending so much more time here.

Looking at the changes to my own savings habits got me wondering how Simple customers may have shifted approaches to saving as well, so I analyzed the data to see what I could learn and share with you.

A few weeks ago, Danielle Nelson (a fellow data analyst at Simple) dug into spending trends amidst COVID-19—now let’s take a look at savings trends too!

How I analyzed the data

Before we dive into this analysis, I want to recognize that many people might not be able to save up during this time. Many people are struggling to cover the bare necessities or dipping into emergency funds to get by. So let me take a moment to emphasize that if you’ve had to dip into your Emergency Fund right now, remember—that’s exactly what Emergency Funds are for.

To uncover patterns in savings habits during the pandemic, I analyzed anonymous data about savings Goals between January 1 and May 15, 2020. I figured the easiest way to determine what you’re saving for is to look at what Goals you’re creating. I parsed the names of Goals and sorted them into two types: discretionary spending and general savings.

  • Discretionary spending,” in the way I’m defining it for categorizing the data, is money for things that people want, but don’t feel they urgently need to get by. While what a person categorizes as a “want” versus a “need” varies tremendously based on individual circumstances, common types of discretionary spending might be traveling for pleasure, shopping for treats, or going to fun events.
  • General savings” are Goals that focus on long-term savings, such as a downpayment for your house, saving for your child’s tuition, or even a more general Goal like “savings.”

Here’s what I learned from my research about how Simple customers are saving.

You’re creating long-term Goals and looking into the future

After splitting Goals into these two categories, I found that the number of Goals created for general savings increased by 15%, while Goals created for discretionary spending decreased by 15%. For example, there was a major drop in Goals for anything related to beauty and personal care services, such as hair or nails or massages. (That makes a lot of sense, since so many salons are closed—and I know I’ll need a massage when this is all over!)

What this data tells me is that you’re looking into the future and saving money now to help yourself in the long-term.

COVID Home Buying

In fact, the Goals you’re now creating have a 20% larger target amount than the Goals you were creating prior to COVID-19. More specifically, Goals created for buying a home have increased by 17%. In the midst of a lot of uncertainty, you’re shifting your focus to the future and aiming to save accordingly.

You’re not saving for travel

The most notable decrease in Goals created during the time period analyzed was, unsurprisingly, anything related to travel—down by 45%. My now-deleted Goal for my Japan trip feels your pain!

After our vacation was canceled, my boyfriend and I decided to start a Goal called “Amazing Vacation.” We have absolutely no idea when we can safely travel again—or even where we’ll be able to go—but we’re keeping our spirits up by making sure we’ll have the money saved when the time comes. If your vacation plans were cancelled too, and you have a little room in your budget, saving towards a vacation in 2021 can help you see some light at the end of the tunnel!

You’re improving your living and working spaces

Even though discretionary spending as a whole is down 15%, there are still some categories within discretionary spending where I see increases in Goals created. These are overwhelmingly for anything related to the home. With outings cancelled and many people working from home, it makes sense that you want to improve the space you spend so much time in.

COVID Home Spending

Goals created for home improvements or home furnishings have increased by 50%. Maybe it’s finally time to build that outdoor deck you’ve been wanting. Maybe that standing desk is going to make a huge impact on your work productivity. Or maybe you just can’t stand looking at that ugly wallpaper in the bathroom one more minute. Improving your living and working space is clearly a priority these days!

COVID Electronics Spending

Goals created for electronics—like laptops, televisions, and gaming systems—have increased by 31%. Being productive and having fun at home is a priority when you’re spending a lot of time there, and that’s reflected in your savings habits. You may have needed to upgrade your computer to work from home. Or maybe you decided to finally invest in that gaming system to socialize online with friends. My brother tells me that reconnecting with friends over online video games has been really gratifying since the start of stay-at-home-orders.

On a related note, Goals created for digital entertainment are up 25%. You’re keeping yourselves entertained at home with things like movie rentals, streaming subscriptions, and other online entertainment purchases. (By the way, if you’re looking for ways to stay entertained for less, here are some tips to save on streaming services.)

COVID Exercise Bike Spending

Finally, while fitness Goals have, as a whole, decreased by 22%, Goals created to save for a Peloton have gone up by 56%. My fellow team member Carolyn recently bought an exercise bike, and I’ve been very jealous of how easy it is for her to workout at home. Based on your savings habits, I can tell I’m not alone in that!

Looking toward the future

Seeing this shift to longer-term savings, as well as the discretionary goals you’re creating these past few months, reflects what Simple customers need in their lives right now. And that helps us provide you with info and resources we hope will be useful during these unprecedented times, plus continue to build new features to support your financial confidence!

We also recognize that many of you might be struggling to save during this time period—and if that’s the case for you, know that you’re not alone. We hope that using Expenses to track your spending and manage your budget will help you feel a bit more in control of your finances and look ahead to the day when you can tuck some money away for Goals down the road.

Louise is a data analyst at Simple
She loves everything involving bikes, from riding outside in beautiful Portland, OR to riding inside at a spin class where it’s dark with loud music to riding fast in triathlon races. No one is as passionate as Louise when it comes to food. Specifically, she is a big fan of dumplings and plans to name her first puppy Noodle—because, well, noodles! She also knows almost every lyric in Hamilton.

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