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The pandemic has changed the saving and spending habits of Americans | CNN

2020-10-29T19:23:59.952Z


CNN Business asked readers how the pandemic has changed their spending and saving habits. Some say they are living off their savings, while others have spent more on impulse purchases or made big changes in their life. | Economy | CNN


The pandemic causes an increase in education expenses 1:16

(CNN) -

For millions of Americans, the economic effects of the coronavirus pandemic have been devastating, resulting in job losses, food insecurity or threats of eviction.

But for many of those who are still employed, or have a spouse who is still employed, the way they use their money has changed.

Some have cut spending and increased savings, paid off debt, or donated more to help those in need.

Others have spent more on impulse purchases, made big life changes, or put them off.

CNN Business asked readers how the pandemic has changed their spending and saving habits.

This is what some of them said.

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Out of work, spending savings

Paul Grim described himself and his wife, Michelle, as "more savers than spenders" before the pandemic hit.

Grim was later fired from his job in the information technology sector.

His wife, who is still working, has reduced her contributions to his pension savings plan (known as a 401K) to free up some cash.

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"We have been drawing on our emergency savings to cover our bills when we fall short due to unemployment," he said.

Paul Grim, who was fired this summer, said he and his wife feel lucky that she still has a job.

They plan to build an even bigger emergency fund for future setbacks.

The couple, who live in upstate New York with their dog, Barley, are eating at home, minimizing impulse purchases and putting off expensive things like dentistry.

"Once we are working again, we intend to increase the amount of our emergency fund to ensure we are even better prepared for any possible future financial emergency, no matter how serious," said Grim.

Alaska's Jim Stearns hosts major events for nonprofits, including the state's annual Salmonfest music festival.

But his business dried up once the big meetings were canceled.

When you started collecting unemployment benefit, you were earning $ 800 a week, but it has since dropped to $ 200 a week, after the temporary federal weekly supplement of $ 600 expired. Now you are using your savings to support yourself. himself and his teenage daughter.

"I spend very little as my savings slowly but surely decrease every day," he said.

Stearns is less concerned with himself than with the hundreds of vendors and musicians he normally reserves for events.

I can fight and survive.

But the tragedy of this is this incredible leakage of poverty.

Reducing expenses, saving more

Sarah Way changed her family budget when her part-time job in California was cut to one day a week and her husband's employer temporarily cut her salary in half.

Travel, dinner and travel expenses were eliminated by default due to the pandemic.

But the blow went even deeper.

“We stopped using a car and took away the insurance.

We cut cable television.

We cut the grocery bill.

After four months, my husband's salary returned to normal, but we did not adjust our budget, ”said Way.

Instead, he noted, “We have increased our retirement savings and created a cash reserve for six months.

We completed some housing projects that weren't finished, but for the most part we are in better shape now than we were before covid.

Natalie Sawyer, a school administrator in Texas whose husband is a retired military man and now a teacher, also took the pandemic as an opportunity to boost household savings.

Staying home made Natalie Sawyer and her husband realize how much they were spending on dinners and purchases that they didn't necessarily need.

“Before the covid, I was spending money without even thinking about it.

We ate a lot and bought things that I didn't necessarily need.

It was kind of a free pass for everyone with my money.

Once the covid arrived and [we] were forced to stay home, we started cooking all [our] meals, ”Sawyer said.

"With that in mind, starting in March I decided to put $ 500 a month into an interest-bearing online savings account just to see if I could make it work."

Sawyer has saved an extra $ 4,200 so far.

Even though she has resumed some shopping, she said: "I have not spent as much as before and we are still cooking a lot more at home ... The covid helped us realize that we do not need more of the things we were spending on."

Karen Jones works in the cloud software industry in Oregon.

Her husband, Kim, whose work is tied to concerts and outdoor fairs, was fired early in the pandemic and then returned in June.

But he was fired again in mid-August.

Jones initially stopped contributions to his 401 (k) plan and put the money in his savings account.

"I wanted cash that I could access immediately if needed and I had no faith that the market would not slide further and void any contributions I made during that time," he said.

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The couple canceled their vacation plans and canceled their credit cards.

The extra money her husband received as a result of the federal temporary unemployment benefit of US $ 600 per week went to savings.

Jones is also saving money on gas and lunches because he has been working from home.

"We still eat out or [do] take out once a week to support local businesses, but we are not looking for other important activities, like vacations during the summer of next year," Jones said.

Put life on hold

Michelle Williams graduated from college during the Great Recession in 2008. And it was only recently that she and her husband, Sheldon, felt financially and professionally secure enough to consider moving to a better home from their initial home in Missouri.

They were also going to start a family.

Now they are falling behind.

Librarian Michelle Williams and her husband, Sheldon, have decided to put off buying a new home and having a family given the economic uncertainty caused by the pandemic.

Williams, who works for her county public library, did not lose her job.

But her husband was fired in March.

Since then she has found a new job, but her household income is slightly lower than before.

Still, Williams said, "We are very, very lucky."

Normally, she would put the extra money they made into her mortgage or student loan debt.

And he had planned to start saving for retirement before the covid hit, but now all the leftover cash is used to create a six-month financial cushion in case they lose their jobs in the next year or have a large medical expense.

"I don't know what's coming in the near future," Williams said.

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Paying debts

Kalikoweo Keolanui-Daniele and her husband, Louis Daniele, work for a coffee farmer in Hawaii and live in a remote area, where their now-paid home runs on solar energy and rainwater.

They also grow their own vegetables.

Kalikoweo Keolanui-Daniele and her husband, Louis, have not lost their jobs.

But they still chose to cut their expenses, pay off debts and put money into savings.

None have been laid off, but Keolanui said the pandemic has had a major impact on their economic habits.

He used his stimulus check to pay off his credit card debt and put more money on his car loan so he could pay it off faster.

Also, "I dedicate at least half [of my paycheck] to savings and plan to continue to do so to accumulate emergency savings."

They have eliminated all non-essential expenses, from recreational shopping to haircuts and beauty treatments.

However, Keolanui invested in a good pair of hair scissors.

"I feel more and more comfortable the bigger the savings get," she said.

You don't know what's going to happen.

There is so much uncertainty.

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Gillian Needham, a mental health professional, and her partner, Mike Ryerse, were not savers before the pandemic.

They used to spend most of their disposable income traveling from their home in Minnesota to see their favorite bands.

But the pandemic has given them an opportunity to save money.

"Since the covid pandemic began, we have reduced attendance at events and bars to zero and have been able to save almost $ 10,000 in the last seven months," said Needham.

That money is now going to help them buy their first home.

Looking ahead, Needham hopes they will continue to save, and not just because there isn't much to do during the cold winters.

"[The longer] I do something, the more it sticks," he said.

Gillian Needham and Mike Ryerse have saved nearly $ 10,000 now that they no longer travel to see their favorite bands perform.

"Shopping for consolation"

Anna Harrington, a college professor in Tennessee, has never been a big shopper.

He used to spend money on plants, concerts and theater.

But since the pandemic, it has become something of an impulse shopper.

"I am 'buying for comfort' in the same way that others 'eat for comfort,'" Harrington said.

“I am saving and spending the same amounts as before, I am lucky that my job is insured.

But last summer, I bought the weirdest things I would have never normally bought: an alarm clock, a pink bunny rabbit and pink slippers, the entire 'Buffy the Vampire Slayer' CD collection and antique furniture from the 1970s, "said Harrington. .

"When the slippers arrived, I thought, 'What am I doing?'

Giving more than ever

Kristina Laursen-Carr, with her son (center) and her husband, has been donating to a local food bank.

Harrington also said he is making more charitable contributions than ever, including donating his entire stimulus check.

So does Kristina Laursen-Carr, a substitute teacher in upstate New York who has four children.

She feels lucky that her family's finances have been stable.

Her husband, Joseph, a retired Army helicopter pilot, is the family's main breadwinner and works for an air ambulance company.

When the pandemic hit, Laursen-Carr was no longer traveling to pick up her two daughters and bring them home from college every weekend.

And the family did not take a vacation this summer.

So he used the money they saved to reinforce his retirement savings and help others.

“The best thing we started doing was buying food [and other] items for our local food bank on a weekly basis.

We donate between $ 20 and $ 30 each week, ”Laursen-Carr said.

Doyle Tarver, a retiree now living in Mexico, said his income, from social security and savings, has been stable.

But Tarver said he has spent more in recent months than before the pandemic to support local businesses, even if that means sometimes buying things you don't need.

And he's been tipping waiters in restaurants by as much as 50%.

"I feel fortunate to be in the financial situation that I am in and I believe that everyone who is in a position to help should," said Tarver.

"There are many who have lost their jobs or had their hours cut and need our help."

Unemployment Pandemic

Source: cnnespanol

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