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A new Credit Karma survey has found that almost a third of Canadian consumers (32%) are saving more now than they were before the coronavirus pandemic.
Although this might seem surprising, a key driver of people’s ability to save comes from an inability to go out. Nearly half (47%) of respondents who’ve been saving more during the pandemic say it’s because they’re not spending money to go out.
We’ve talked about how the fear of missing out, or FOMO, led young adults in Canada to go into debt to keep up with friends. While the pandemic may be changing this behavior in the short term, our survey indicated that it also may be changing the way some Canadians will think about FOMO-related spending in the future. Almost half of those surveyed (45%) say they’ll feel more able to keep up with friends without overspending within the next year. (Learn more about our methodology.)
In addition to potentially feeling less social pressure to spend after the pandemic is over, some survey respondents say they’ve developed healthy financial habits — like monitoring their finances more closely and setting up a monthly budget — that they plan to continue after the pandemic. We’ve got some tips to help you get your finances in shape and avoid FOMO-related spending.
Key survey findings
|One third (33%) of respondents are saving more during the pandemic than before COVID-19. The primary reason cited for more saving is not going out (47%).|
|Almost one-third (32%) of respondents think they’ll save more post-pandemic compared with pre-COVID-19, and nearly half of respondents (45%) say that within the next year they’ll be able to keep up with their friends without spending money they don’t have.|
|Canadians from our survey said they’re most likely to cut back on social activities with large groups — including concerts (41%), travel (40%) and weddings (38%) — once the pandemic is over.|
|The pandemic has led to some to cultivate healthy financial habits that Canadians want to keep post-pandemic, such as cutting back on daily spending (35%), keeping track of their finances more closely (32%) and maintaining a monthly budget (26%).|
How do Canadians think their spending habits will change post-pandemic?
The coronavirus is leading some Canadians to adjust their finances and save more, our survey found. Almost one-third (32%) of those surveyed think they’ll be saving at least a little more after the pandemic.
Here’s what people surveyed plan to spend less on post-coronavirus:
- Experiences like movies, concerts and sporting events (41%)
- Travel (40%)
- Social events like weddings, birthday parties, or happy hours (38%) as well as recreation and fitness (38%)
- Shopping for clothes or shoes (34%)
- Transportation (29%)
- Subscription services like Amazon Prime, Spotify and Netflix (26%)
- Food and drink (25%) including restaurants, groceries, meal delivery services and alcohol
How has the pandemic changed Canadians’ financial habits for the better?
The pandemic has had a positive effect on some Canadians’ finances, according to our survey. For instance, 45% of surveyed consumers think they will be prepared to keep up with friends without spending money they don’t have. And almost a quarter of respondents (24%) say they’re at least a little more comfortable talking about their finances now with friends and family than they were before the pandemic.
Here are the top three positive financial habits that Canadians most want to continue once the pandemic is over, based on our survey:
- Cutting costs on daily expenses (transportation, gym memberships, take-out, etc.): 35%
- Tracking personal finances more closely: 32%
- Keeping a monthly budget: 26%
Still, the pandemic may have affected different generations’ attitudes toward their finances in distinct ways. For example:
- Millennials: 46% of respondents felt pressure to spend to keep up with friends before the coronavirus, but 37% expect to feel less social pressure post-coronavirus. And 23% of Canadian millennials from our survey say COVID-19 has changed their worldview and that they no longer care about money.
- Gen Z: Gen Z respondents are the most likely to say the pandemic has led them to want to save more money for their families and to spend less on themselves (49%). More than half of those surveyed from this generation felt pressure to spend money they didn’t have to keep up with friends before the pandemic (52%), but a majority (54%) say they’ll feel less FOMO-related spending pressure once the coronavirus ends.
- Gen X and older: Many surveyed in this group said they haven’t adopted any new financial habits as a result of the pandemic (39%). And only about a quarter (27%) said the pandemic has caused them to save more money.
Tips to help with FOMO-related spending during and after the pandemic
If you’re among the 34% of Canadians we surveyed who said they’ve experienced feeling pressure to spend money they don’t have to keep up with friends, changing social norms as a result of COVID-19 may give you an opportunity to work on avoiding FOMO-related spending post-pandemic.
- Track your spending and keep a budget: Many Canadians we surveyed said helpful financial habits they’ve developed during the pandemic include keeping a closer eye on spending (32%) or keeping a monthly budget (26%). In pre-pandemic times we might have recommended something like the 50/30/20 budget rule, but now it’s most important to just keep an eye on how your money gets spent and save anything you can to cover emergency expenses.
- Be open and honest with friends and family about your financial situation: It can be tough to talk about money. Money comes with complicated feelings, some of which might stem from your childhood, according to the American Psychological Association. Although your comfort level may vary depending on how well you know someone, talking about your finances can help you let go of feelings of shame and guilt and also help those closest to you better understand your situation.
- Be kind to yourself and know that the path toward financial health takes time: Think about how you plan to cut back on spending, get your finances in shape and save more as “intentions” rather than firm goals. This framing leaves space for you to be kinder toward yourself if you fall short. It’s also important to acknowledge that progress isn’t linear and may take some time.
On behalf of Credit Karma, Qualtrics conducted a nationally representative online survey in June 2020 among 1,017 Canadian adults to better understand how their spending habits have changed during the coronavirus pandemic.