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Home > Finance > How Personal Finance Habits Have Evolved in the COVID-19 ERA

How Personal Finance Habits Have Evolved in the COVID-19 ERA

Published by linker 5

Posted on October 9, 2020

5 min read

Last updated: January 21, 2026

Illustration of personal finance changes post-COVID-19 pandemic - Global Banking & Finance Review — This image illustrates the significant shifts in personal finance habits during the COVID-19 pandemic. It highlights changes in spending behavior, focusing on consumer debt and savings trends, relevant to today's financial landscape.

By Nate Nead is a licensed investment banker with Four Points Capital Partners, LLC and Principal at Nead, LLC

Americans aren’t known for having the best personal finance habits. We (as a collective group) have a love affair with consumer debt (thinking all debt is a catalyst toward wealth), tend to spend beyond our means, and don’t keep enough cash or investments on hand to guarantee a secure financial future. A thriving economy has masked these warts for the better part of a decade. Then came the COVID-19 pandemic and millions have been exposed.

But how has this crisis changed the personal finance habits of Americans? And can we expect these changes to become habitual in the coming years? We’ll cover all that and more in this article.

Exploring Interesting Shifts and Trends

Any time a seismic shift occurs, it’s interesting to see what sort of impact it has on wallets. And here’s what we’ve seen in 2020 thus far:

Consumer Spending Has Changed

According to a survey of 1,000 Americans, more than two-thirds said the pandemic has caused them to find new ways to cut back on spending. And while spending on groceries has skyrocketed, many Americans have found extra money as a result of less spending on entertainment, restaurants, and in-store shopping.

While consumer spending has plummeted in most areas, there are a few categories that have seen increases. Most notably:

Household cleaners and soap have obviously become hot commodities in today’s marketplace. Sales of cleaning wipes are up 100 percent, as is aerosol disinfectant. Even dishwasher detergents and kitchen cleaning products are up by roughly 50 percent.
Vitamins and supplement sales are up approximately 50 percent, which shows an increased focus on health and well-being.
With hair salons closed for many months, hair color products saw a 30 percent spike during the height of the COVID crisis.
With more people working from home, coffee sales have enjoyed a big jump. Companies like Coffee-Mate, Nescafe, and Starbucks retail products have all seen double-digit increases.

Over this same period, we’ve seen a steep decline in consumer spending on cosmetics and sun care products – both for rather obvious reasons.

Online Shopping Takes Center Stage

According to a recent study, 36 percent of consumers now shop online weekly – up from 28 percent pre-COVID-19. So while brick and mortar retailers have taken a hit, many online stores are thriving.

While online shopping is hotter than ever, it’s not like people are throwing money into the wind. More than one in two consumers say they’re looking for deals and sales. For click and mortar brands, consumers expect to see curbside pickup options are.

Savings Account Balances Have Spiked

Millions of Americans live paycheck to paycheck. Some do so by choice, while others simply don’t know how to manage their money well. Spending is sexier than saving, but it’s certainly not smarter. This crisis has shown people how important it is to put away cash for rainy days.

Research on personal finance habits during the COVID-19 pandemic indicates Americans have significantly increased their savings in spite of personal income decreases.

“Between the week ending March 2 and the week ending April 27, total dollars held in savings deposit accounts — including high-yield savings and money-market accounts — jumped from about $9.98 trillion to $10.91 trillion,” Business Insider reports. “On a monthly basis, the amount of money sitting in savings accounts increased by about 2.7% from February to March, and then by about 4.4% from March to April.

For perspective, savings increased by less than 1 percent month over month during the same period in 2019. This indicates a determined focus to cut unnecessary spending and focus on building up emergency funds. Whether this behavior lasts beyond the crisis remains to be seen.

Budgets Are Back

Only a fraction of Americans have a consistent and concrete household budget that they follow from month to month. But with earnings down and uncertainty high, millions of Americans have now become believers in the importance of tracking income and spending. The hope is that this habit will stick. After all, households that operate on a strict budget tend to make wiser financial decisions.

More Change to Come

We’re only on the front end of this crisis. While the pandemic will hopefully be neutralized in the coming months, there’s still plenty of economic fallout ahead. Some are saying 2021 will bring a house crash and economic collapse. Others are saying we’re experiencing a K-shaped recovery where white collar Americans will thrive and blue collar Americans will continue to suffer. But regardless of what happens, this much we know: Smart personal finance habits win over the long haul.

If we want America to become a land of smarter macro financial decision making, it starts with making intelligent micro financial decisions. And the hope is that this crisis – for all of its undesirable effects – is the catalyst we need to wake up.