By Rosie Wolf Williams, Next Avenue
The last year changed so many things in all our lives, including how we spend. Although the recent reduction of pandemic restrictions has some people starting to splurge, COVID-19 has been a time of frugality for many Americans, especially older ones, according to a CouponFollow survey and Next Avenue interviews with consumers.
“I was surprised at how many people [about 3 out of 4] defined themself as frugal,” says Marc Mezzacca, founder and CEO of CouponFollow. “Unfortunately, many have faced tough economic times due to COVID-19. This may have exacerbated the need for frugal behaviors and money management.”
Turns out, according to that survey, many millennials, Gen Xers and boomers believe their elders are more frugal than they are. Mezzacca, who describes himself as an “older millennial,” was surprised to learn in his survey that millennials are less likely than older generations to consider frugality a positive characteristic.
A poll by the social shopping platform Slickdeals found that 60% of Americans say the pandemic has changed their purchasing behavior, with many cutting spending on movies, clothes and entertainment, but increasing spending on health care and groceries.
Scouring for Spending Cuts
Kris Herndon, a 50-year-old freelance writer in Greenwich, Conn., found that the pandemic made her take a harder look at her spending habits.
“Before the pandemic, I’d been pretty careful with money. I don’t really eat out often, my car is paid off and I rarely buy new clothes,” says Herndon. “But when the pandemic hit, I lost a major client and some other income was delayed and I really panicked.”
Herndon says COVID-19 led her to scrutinize all her expenses and make some changes. “I cancelled cable, stopped paying for a landline, unsubscribed from every streaming service and magazine and paid down a credit card balance. The most painful thing to give up was my gym membership.”
Herndon started using a free fitness app instead and began skipping rope as well as running.
“Now that gyms are open again, I don’t think I’ll go back yet,” she notes. “I miss seeing people at the gym, but I’m not sure that spending a hundred dollars a month for something I can do for free in my backyard makes sense anymore.”
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Job Woes and Tighter Spending
Sarah Jowett, 47, has become more frugal due to the difficult circumstances she has faced in the pandemic. Jowett lives with her mother and son in Merced, Calif., and works two jobs, as a process server and in floral delivery. Her mom is an evaluator for state-sponsored nursing home care.
“We already were frugal but became more frugal due to [work insecurity],” explains Jowett. “Courts and offices closed, so process serving was only open by a slim margin. Nursing homes were closed, so there weren’t many people entering the system.”
Jowett and her mother, who’ve limited shopping to senior hours in the early mornings, have only been purchasing what was on their list of needs.
“I am diabetic, so all the items people were hoarding were not what we were buying — things like pasta, ramen and beans. But what I did need — things like string cheese and frozen veggies — was challenging, because it was all under purchase limits,” said Jowett.
Mezzacca points out that those who’d practiced simple frugal behaviors pre-pandemic, like packing lunches for work, may have adapted to the crisis more easily.
“The most significant area of change for me is that I’ve stopped dining out pretty much completely,” he says. “We make all our meals much more frequently now. It is much cheaper. We’ll plan to continue this new routine, especially now that we’ve got an excellent meal-planning strategy in place.”
Jean Peelen, 79, of Flat Rock, N.C., considered herself frugal even before the pandemic began.
The Urge to Splurge
“I am retired and on Social Security, a pension and a little savings. While not poor, I always kept a close eye on my expenditures,” she notes. “Before the pandemic, I sold my condo in Florida and bought a tiny house in a tiny-house village. This reduced my expenditures. I own only my tiny house and my car.”
But unlike Herndon and Jowett, Peelen has actually loosened her rein on her frugal behavior lately. Call it the “life’s too short” mentality.
“I had estimated how many years I still might be around and knew where I was financially. When the pandemic hit, I realized my life could be considerably shorter than my estimate,” says Peelen. “I have COPD, so I was one of the more vulnerable to COVID. That created an urgency about enjoying life right now.”
So, Peelen decided to have a facelift. Her reasoning: “I always have been vain, and I greatly disliked the wrinkles that creased my face and the turkey aspect of my neck. Pre-pandemic, I would never have seriously considered such a thing. Mid-pandemic, I thought, why not?”
And Peelen adds, as more businesses open, “I can go out looking good.”
Her splurge puts Peelen in good company.
The new Charles Schwab 2021 Modern Wealth Survey found that 24% of Americans plan to splurge on a vacation, 21% plan to dine out at a fancy restaurant and 15% expect to host a party. Slickdeals reports that Americans are now spending an average of $276 a month on impulse spending, up 51% from April 2020.
It’s beginning to look as though the pandemic spending ways are dropping like masks.