- September 28, 2021
- Posted by: Sushil Kumar
- Category: Budget and Goals
This pandemic has taken all the people in a surprising way and with practically limited reaction measurements. The impact of this situation has not only affected people’s health, mobility, emotional stability and their usual frequent activities, but has also become an economic challenge. The financial situation both on a personal level and on a business level is still very uncertain, since it is difficult to estimate the social and economic consequences that this situation will leave, everything will depend on the actions that are adopted to restart the economic activities once the pandemic has been controlled. Well, even though a part of the Americans has been followed the safety guidelines, the coronavirus persists in the population with the highest risk and with the lowest purchasing power, being this the main reason why the world economic future continues being uncertain.
Certainly the emergency at one point forced people to stay home as prevention measurement, therefore, the expenses or need to acquire some products and goods decreased automatically; however, this situation was based on income levels, those with the greatest resources have reduced their expenses by 17%, while households with low income have only managed to reduce their expenses by 4% as of June 10, 2020, and it is striking that unlike other times of economic crisis, this time Americans have reduced their consumption of restaurants, hairdressers, or similar services, while in previous crises they stopped buying expensive products such as houses and cars.
How has it been possible to save and who has been able to save? The decrease of fuel usage and mechanical expenses of vehicles, or any transportation in general is decisive, not only due to isolation measures, but also due to the people who started working and studying from home.
Besides that, the leisure activities such as going to clubs, gyms, cinemas, bars and discos have generated significant savings for citizens. As an example, USA Today exposed to the public the case of a citizen of California, who assured that by staying at home during the pandemic, and managing to avoid the expenses of the items previously exposed, she achieved substantial savings in the order of 4000USD, money that could be easily allocated to other types of items and in her particular case it was allocated to upgrade her home.
However, households with low income are those that haven’t being able to save, since their expenses remained similar to those they had before the pandemic.
Read also Tips to Prepare Your Finances for a post-Covid life
What expenses, obligations and / or needs increased or emerged with the pandemic?
In many homes, the furniture had to be upgraded for the development of work and academic activities; as well as the purchase of laptops and additional technologies or services for the same purpose.
A first glance, it could inferred a complexity in economic matters, but not in all environments, although jobs were lost, an imminent economic recession was manifested with which some Americans have managed to save more lately than under any other previous circumstance; a higher percentage of the people who were able to save are from high-income households.
The final destination of savings during the pandemic will obviously be ruled by individual needs; however, they will remain to be allocated to the uncertain future that the situation holds for us.