Saving more: the unintended consequence of COVID-19
Restaurants shuttered, retail outlets boarded up and drinking holes dried up – there was no place to spend money.
“I was actually having a lot more money because I was staying inside, not going out as much, not spending,” said one young man CTV News stopped to talk to on the street.
“I think I started saving money as well,” said another young woman.
A survey by MagnifyMoney.com found that for some, saving increased in May over April, from 34 per cent to 42 per cent.
They were the lucky ones. The survey also found 41 per cent didn’t make enough money to save and 24 per cent had too many expenses.
Government assistance is believed to have helped those who did put more money away. Although it was Americans who were surveyed, Brianna Wright of MagnifyMoney believes Canadians would have been affected in the same way.
“Canada has certainly been impacted and I would say savings habits typically tend to mirror each other,” she said.
The survey also showed that savings patterns have shifted. In an April savings survey, the top three things people were saving for were general savings, emergencies and vacations, but in May vacation savings got bumped in favour of retirement savings.
Uncertainty about the future and a potential second wave of the virus has people holding off on travel this year and bracing for the unexpected.
“The coronavirus pandemic has definitely underscored just how important it is to have an extra pocket of money away that you can use in an emergency, no matter how large or small, it does make a difference,” Wright said.
Will the trend continue after the pandemic is over?
“While I would hope that this continues, I do think that as we start to see consumer overall spending tick back up, we may see a little dip again,” Wright added.