Consumer spending trends changed dramatically this year. If you look at your own spending, you will see that this is true. Current events have pushed us to make a lot of changes in the way we spend our money.
But why should you pay attention to how consumers are spending right now?
Well, the main reason is for understanding. It’s important to know what is causing us to spend the way we do. It’s one of the things that we need to ensure because it will help us make the right decisions when it comes to our finances.
You see, the way you spend your money is just as important as how much you are earning. In fact, some people believe that your spending habits are more important. Even if you earn a huge amount of money, if you don’t know how to use it, you can still compromise your financial position.
This is why you need to understand consumer spending trends so you can compare your own expenses. You can identify the factors that are affecting how you spend your money. Because the way we spend money is heavily influenced by what happens around us.
Take a look at this pandemic. It caused a massive change in how we spend money. If you want to keep your finances secure, you have to consider how recent events will force you to alter how you spend your money.
What do consumers buy during the pandemic
How much as consumer spending change this year?
The truth is, we still spend our money on the same things. But the priorities have changed as circumstances around us continued to develop. The way the coronavirus pandemic led to the recession has caused us to reevaluate how we used our income.
There are 3 main categories that experienced the biggest change.
Let’s start with what we spend on food and groceries. Obviously, anything that will provide us sustenance is important. But how has the pandemic changed how we spend on this category?
Reports revealed that as people were forced to stay at home, most of their spending went to grocery expenses. What used to be spent on restaurants were now spent in grocery stores. We all know how it’s more cost-friendly to cook your own food instead of buying take-out or dining out. So it’s safe to say that people probably saved a lot of money here.
But to say that people really saved money overall – that has yet to be determined.
For health reasons
What about health-related expenses? How have consumer spending trends have changed? Well, this is a health crisis so it won’t be surprising if a lot of people will end up having to pay off medical debt. And it’s highly possible that it would be a huge amount too.
The health care cost in the country is very expensive. With the coronavirus pandemic happening, the cost to get medical care skyrocketed. It doesn’t matter if you are going to get treated for a condition other than the COVID-19 virus. It will still cost you a hefty amount of money.
So how are people reacting to this?
Well, people who don’t have the money to spend on the huge medical bills will most likely skip getting treated. Not to mention it would be safer to stay away from hospitals when coronavirus patients are admitted there.
But if you are one of the unfortunate ones who need to be hospitalized during this time, you have to prepare to spend a lot on it.
Finally, the other category that experienced a big shift is the entertainment expenses. Gatherings are no longer encouraged. That means going to concerts, watching movies, and attending festivals and sporting events are no longer possible.
So what else can people do? Well, a lot of people turned online. According to reports, video games and esports are taken to greater heights because of recent events. People looked online for entertainment. It was what they relied on to get through the boring days spent at home.
Because let’s face it, even if the lockdowns are lifted, things will not go back to the way it was before. So finding other entertainment options will really help us into the new norm of things.
What causes these consumer spending trends?
There are three things that caused the changes in consumer spending trends. Going over it one by one will help you understand and improve how you spend your limited income.
At first, the change was caused primarily by the pandemic. When people realized that the coronavirus is deadly and contagious, it felt like the apocalypse was near. So everyone scrambled to stock up on basic necessities. People hoarded supplies and for a moment, things looked really chaotic.
People were panicking because nobody really understood what was going to happen. The virus was an unknown and it was obvious that the government was not sure about what to do. That caused a lot of people to take care of their own survival. And that meant making sure they all have enough stocks to survive at home.
After the initial panic, things settled down. Still, the changes in our spending became more pronounced. The lockdown and quarantine orders kept us from some of the expenses that we used to spend huge amounts of money on. These included travels, dining out, and other entertainment-related costs. We now focused on what we needed as we stayed at home.
But while the threat of the pandemic is still here, another threat made its presence known. The pandemic pushed the economy over the edge and into a recession. Businesses are closing and unemployment rates are rising. This is causing us to change more of your spending habits. Now, the focus is to lower household spending and just spend on what is necessary.
People are bracing themselves for the long road to economic recovery. They want to make sure that if things get worse, they can survive this whole ordeal without losing too much of what they already built for themselves.
Finally, consumer spending trends are also driven by the need to make ourselves feel better. If you notice, a lot of people are buying stuff online. Apparently, there’s a certain level of satisfaction when you buy something new. A study mentioned that 3 out of 4 respondents admitted that impulsive shopping helped put them in a more positive mood.
Considering how much negativity is in the world right now, a bit of positivity is always welcome.
But this has to be approached with caution. Because if you are not careful, you might end up plunging into a deep debt pit. And with the recession happening as well, you don’t want to have a huge amount of debt too. So indulge but make sure you know how to pay it off. Don’t be reckless if you know you can’t pay back the debt.