The pandemic has affected the way we spend and how we are look after our money now and in the long-term. Our report Future Money: how COVID-19 changed our financial habits suggests people of all ages are turning to the three P’s to manage their finances.
Plan for the future
Despite the impact of the pandemic on the economy, our wealth expectancy – the amount of money we expect to have by the age of 60 – hasn’t changed. This means that, with people still determined to have their dream retirement, financial planning is more important than ever.
After all, world events can force us to change our financial habits quickly. In India, for example, the pandemic has seen millennials shed their ‘buy now, pay later’ mindset to become more frugal and forward-looking with their personal income. By spending less of their disposable income on treats, like travel or eating out, young people are setting money aside for a rainy day and turning to investments.
Looking to the future is not just about saving. In times like this, keeping up with change by upskilling is more crucial than ever. Our research has revealed an interest in ‘intentional learning’ (goal orientated education), especially among the 18-to-35-year-olds. An article by McKinsey explains how fundamental intentional learning is as: “The level of intention we bring to improving our performance readies us for challenges, prepares us to raise our skills when needed, and ultimately keeps us inspired and engaged. […] It just might be the most fundamental skill for professionals to cultivate.”
The pandemic is also changing where we spend. Our survey revealed that more than half of respondents are now more likely to shop locally, sustainably and with small businesses. With the 18 to 44-year-olds leading this trend, it’s possible these new habits will continue in the long-term. That’s good news on several fronts. Shopping locally not only reduces carbon emissions, it also boosts local employment.
Ethical shopping decisions are also extending to the food we eat. In Hong Kong, the plant-based food supplier Green Monday reported a 20 per cent jump in sales in the first quarter of 2020. Many experts say eating less meat is one of the most effective ways to help the environment, as it reduces deforestation and methane emissions associated with rearing livestock.
Power up your computer or mobile device
COVID-19 has accelerated the use of technology to bank and budget. Half of the people we surveyed are using online banking services more than they were pre-pandemic, with India, Kenya and the UAE leading the charge to faster, more agile access to personal finances through mobile apps.
Meanwhile, over 60 per cent of those surveyed said the pandemic has encouraged them to monitor their spending more carefully. In fact, more than three quarters are keen to use or are already using digital budgeting tools to help.
The use of tech is growing equally across age groups. In Malaysia, more than half of the 45 to 54-year-olds surveyed are willing to use Bitcoin for online spending (a potential first step to using digital currency as an investment), while more than one in three of the over 65s said the same.
The pandemichas changed the way we think about our money and – despite the upheaval – people all over the world are responding positively.
Not only are many planning for the future by saving more and shopping more sustainably, they are turning to technology to help them do it.