COVID has consumers rethinking their spending habits, Provident survey says

The COVID-19 pandemic is having a dramatic — but not unexpected — effect on American consumers’ spending habits, according to a new study from Jersey City-based Provident Bank.

The study of 400 U.S. adults found that 40% of respondents are spending less on travel, vacation and dining, Provident said, while 32% are spending more on new needs due to the pandemic.

In addition, 27% are spending less overall because they are more conscious of the need to save for an emergency.

“As a result of COVID-19, many Americans have changed or lost jobs and have had to reconsider how they spend and save their money,” Executive Vice President and Chief Retail Banking Officer Vito Giannola said in a prepared statement. “Many are looking ahead to the new year and setting new financial priorities — including increased savings efforts, given the unpredictability of 2020.”

A renewed emphasis on saving includes 98% of respondents saying it is either “very important” or “moderately important” to save in the event of a future crisis. And 95% think it is either very or moderately important to save for retirement.

In addition, 65% said improving overall savings was a financial goal for 2021, with 60% choosing to pay off debt as a goal and 51% to set a budget.

“From refinancing to focusing more on retirement, we see a clear shift in the way our customers think about and handle their finances, and we expect that to continue into the new year,” Giannola said.

Finally, 89% of respondents rated their banking experience as “very good” or “good” over the past year, and nearly 80% gave their bank’s customer service a positive rating.

“Although it has been a challenging year, consumers report continued positive relationships with their banking partners,” Giannola said.

The survey was conducted online in November.