By Victoria McNally // SWNS
Paying fewer restaurant bills and buying less movie tickets over the last year may not have helped as many peoples’ finances after all — according to a new survey, four in 10 Americans believe they actually spent more money in 2020 compared to 2019.
As part of an exploration of the COVID-19 pandemic’s effect on spending and saving in the United States, 2,000 people were asked to consider how their own habits changed in 2020.
For example, while conventional wisdom that brewing coffee at home saves money down the line, 45% of respondents are actually spending more on their caffeine fix since the pandemic began.
On the other hand, 63% of respondents admitted that they used to make a lot of routine, regular purchases 12 months ago that they no longer make now, spending an average of $108.56 less each month.
In fact, 59% believed that the pandemic has had a positive impact on their finances, having decreased their spending in other categories like clothing (34%), cosmetics (39%) and commuter costs (25%).
But while some are thriving, a fourth of people (25%) believe the pandemic has negatively affected their finances, including more women than men (25% vs 19%).
Reported by OnePoll on behalf of Intuit, the survey also reveals a possible correlation between someone’s age and financial vulnerability.
One in four (25%) of millennials between the ages of 25 and 40 report a negative impact on their finances, compared to a little over one in three (37%) baby boomers aged 56 and over.
However, although a whopping 95% of millennials polled say they’re either employed or self-employed, only 41% of boomers say the same, while another 44% are retired.
Millennials are also having a harder time keeping their impulse spending in check; 67% say it’s gotten out of hand lately, as well as 64% of all male survey-takers.
As of March when the survey was conducted, 38% of respondents expected their tax return to be smaller this year. But although 43% believe that receiving a stimulus package in 2020 would affect their taxes, tax experts say that this isn’t the case.
“Taxpayers are experiencing several different forms of tax relief as a result of recent stimulus packages and there are some misconceptions about what income is taxable and what is not,” said Greg Johnson, Executive Vice President at Intuit. “For most taxpayers, their refund will be the biggest check they receive all year. A tax refund can be a life-changing event that helps people solve their biggest financial problems, be it paying off debt, saving or covering costs to make ends meet.”
In the case of small businesses, community support is helping with their prosperity — 61% of respondents said they’ve been deliberately supporting small businesses more over the past 12 months while 50% shared that they are close friends or family members with a small business owner.
“The pandemic has increased the number of people and small businesses that have unsuccessfully tried to access capital from traditional financial institutions, resulting in their looking to new solutions to meet their financial needs,” added Johnson, who also serves as the general manager for Intuit’s consumer group that includes TurboTax and Mint. “The power of technology can break down barriers and give those in need access to money they may not qualify for with traditional banks. Technology can make access to money faster, cheaper and also remove friction from the application process.”
The pandemic has also inspired some people to shift their professional mindset and ambitions; 22% are thinking of starting their own business, and another 26% say they’ve been inspired to explore the world of self-employment.
Of those polled, 21% said they qualified for more loans in 2020.
TOP FIVE THINGS PEOPLE ARE SPENDING MORE MONEY ON
- Coffee - 45%
- Streaming subscriptions - 36%
- Package delivery/shipping costs - 35%
- Technology - 33%
- Cell data - 33%
TOP FIVE THINGS PEOPLE ARE SPENDING LESS MONEY ON
- Clothing - 34%
- Cosmetics - 30%
- Transportation/commuting - 25%
- Entertainment - 24%
- Alcohol - 21%