NEW YORK — Gen Z and millennial Americans are “cashing in” on lost time due to the pandemic and applying new financial lessons from this ever-changing time.
A new survey polled 2,000 Gen Z and millennial Americans and looked at their new spending and saving habits during the ongoing impact of the pandemic. Nearly seven in 10 (69%) are getting back to spending money on things they missed because of COVID-19.
Additionally, three in four are focusing their spending on activities that allow them to catch up with friends and family.
Getting back out there
When restrictions faded and re-openings began in early summer 2021, Gen Z and millennials took advantage, with 51 percent of respondents splurging on a trip. Another 49 percent have been spending money on fancy drinks and dinners at bars and restaurants.
Conducted by OnePoll on behalf of Laurel Road, a digital banking platform of KeyBank, the survey also finds 59 percent say that they’re spending more money now than they did before the pandemic and 58 percent created new savings goals because their spending habits have changed.
Still, almost six in 10 respondents agree they’re more financially confident than they were before the pandemic and credit their desire to be more financially responsible to COVID-19.
It’s translating to a shift in how Gen Z and millennial Americans manage their personal finances, as just over 30 percent admit they’re budgeting for the first time ever. A further 39 percent are using new methods, like apps or dedicated spreadsheets, to keep track of their budget.
Saving up during COVID
The survey also finds 61 percent of respondents managed to save at least $1,000 from the start of the pandemic in 2020 through the start of summer 2021. One in 10 saved over $5,000. With those new savings, Gen-Z and millennials say they’ll put that towards paying off their student loans (38%), spend it on a vacation (37%), pay their rent (32%), and make payments on their credit cards (29%).
“It’s encouraging to see that young Americans are feeling more financially confident throughout what continues to be a very difficult and challenging time and that so many are focused on maintaining their hard-earned savings,” says Alyssa Schaefer, Chief Experience Officer at Laurel Road, in a statement. “Importantly, we see from our survey that many are balancing using their savings to both benefit their long-term goals, including paying off their student loans, and have fulfilling personal lives, a balance that is necessary for a strong financial future.”
Getting back on track with student loans?
Respondents’ confidence in their ability to save remains high, with two-thirds (66%) noting they believe they can achieve their savings goals moving forward.
In fact, this is top of mind for many, given that respondents noted that budgeting (21%) and increasing savings (10%) are the top financial lessons they learned during COVID. These lessons are making a major impact, as over one in five (22%) Gen Z and millennials note that if they had an extra $1,000 to spend for the rest of 2021 they would put it in their savings account.
The survey also polled 2,000 Gen Z and millennial Americans with student loan debt. Three-quarters (75%) with private student loans arranged for forbearance during the pandemic. Additionally, 73 percent of those polled with federal student loan debt also made use of the federal forbearance period to pause payments on their student loan debt.
“With many borrowers now preparing for the student loan forbearance period to end, the survey shows an understanding of the benefits of refinancing student loans,” Schaefer adds. “Specifically, refinancing is a great option for those looking to save over the life of their loans, creating opportunities to use that additional money to achieve savings goals as well as some much-needed fun and self-care.”