How the Pandemic Changed Americans' Plans for 2020
It’s been a difficult and uncertain few months, and this year has forced many to reassess their relationship with money.
3 min read
By now it's clear that COVID-19 has had a profound impact on nearly every aspect of our lives: from the way we spend, to where we go, to how we save, and how we interact with one-another and the world around us. No one could’ve anticipated the magnitude of this pandemic, and most, if not all of us, envisioned 2020 very differently.
Trying to understand the profound impact that COVID-19 has had on our lives, we spoke to 3000 people in the U.S.¹ about their plans for this year and how these might have changed with the pandemic. We discovered that 64 percent of respondents had adjusted their personal and financial habits and plans as a result of COVID-19.
It’s been a difficult and often uncertain few months, and this year has forced us to take stock of our spending and re-prioritize our relationship with money. Over a quarter of the people we talked to had to seek financial support during the pandemic. This year also affected our family and personal relationships – 34 percent of those we spoke to now talk more with their families, and 79 percent of them are committed to continue once things go back to normal. A significant 22 percent of those we spoke with are also more willing to talk to a loved one about money, which has been a rather taboo subject for many in the past.
Shifts in spending
2020 has seen its fair share of cancelled vacations, postponed weddings, zoom birthdays, and socially distant gatherings. It has also forced many of us to reconsider big purchases and travel plans. We learned that before the pandemic, 61 percent of those we spoke with had planned to buy a big ticket item like a car or a house, had plans to go on vacation abroad, or were hoping to pay off debt this year.
63 percent had to cancel or postpone those plans, causing 39 percent to lose money, with an average loss of $759. Perhaps a silver lining is that 71 percent of those surveyed were able to save money due to cancelled plans, averaging $2102. This might reflect a need to be more careful with spending during uncertain times, particularly when it comes to preparing for the unexpected.
Shifts in travel
Few industries have been impacted as deeply this year as travel. Not only is moving around a lot more complicated than it used to be due to travel restrictions, but the risks of air travel and mass transit have become magnified due to health concerns. We learned that 30 percent of those we spoke to had plans to travel abroad this year, yet only 21 percent of those hoping to travel internationally anticipate those plans to happen as expected. Attitudes towards foreign travel were mainly fueled by a concern that it might increase the number of COVID cases in the US, followed by concern over personal health or that of a loved one (32 percent).
However, of those we surveyed, 58 percent were planning to take or took a staycation, making this an appealing alternative for those needing a break from their day-to-day.
Shifts in financial habits
This year hasn’t only made more Americans mindful and deliberate about how they spend their money, but how they pay for goods and services. Over a quarter (28 percent) of those we spoke to are now more likely to pay by card than with cash, and 63 percent plan to continue going cashless when possible after the crisis.
Hoping to avoid physical branches, or unnecessary interactions with strangers, we also learned that 31 percent of people are more reliant on mobile banking.
“The pandemic has forced us to become more cautious with our money. We are seeing that people are developing new digital habits, especially with their finances, as our plans and lives have entirely changed,” explains Alex Weber, Chief Growth Officer at N26.
“At N26, we’re dedicated to helping consumers become more financially confident and we are proud to offer a product that empowers people to live and bank their way.”
Open an N26 account in under 5 minutes right from your phone, and discover banking that is transparent, intuitive, and designed to help support your financial future.
¹Findings are based on a survey by Sapio commissioned by N26, of over 3,000 adults across the U.S. The poll was conducted in July and August 2020.
The N26 account is offered by Axos Bank®, Member FDIC. N26 Inc. is a service provider of Axos Bank. All deposit accounts of the same ownership and/or vesting held at Axos Bank are combined and insured under the same FDIC Certificate 35546. All deposit accounts through Axos Bank brands are not separately insured by the FDIC from other deposit accounts held with the same ownership and/or vesting at Axos Bank. The N26 Visa® Debit Card is issued by Axos Bank pursuant to a license by Visa U.S.A. Inc. The N26 Visa Debit Card may be used everywhere Visa debit cards are accepted.
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