Emergency Savings

How the Coronavirus Will Change How We Save Money

NBC 7 Responds looked at how the coronavirus pandemic will change our spending and saving habits

NBCUniversal, Inc.

The coronavirus pandemic is a world-changing event. More than 1 million people in the United States have tested positive for the virus, and millions are under stay-at-home orders. Financial experts say this will shape the behavior of younger generations.

"The crisis is causing over half of young people to say they need to save more money," said TruePublic's CEO, Kaben Clauson, whose company recently surveyed more than 10,000 millennials and members of Generation Z (aged 16-35) about the pandemic.

Clauson said that he believes that, just as the Great Depression changed behaviors, so will the coronavirus pandemic.

"There will be a lot more young people saving for the next pandemic, the next major situation if there ever was to be one," Clauson said. "They're not in college, maybe they've been laid off ... so it will be interesting to see how this unfolds."

Clauson said that many of those whom were surveyed have maxed out credit cards because they did not have enough savings. It will take time for people to financially recover, especially with the growing student loan crisis, according to financial advisers.

"People are feeling the stress, they're feeling the emotion," said Mary Beth Storjohann of Abacus Wealth Partners. "They know what it's like to not be in a position to have those savings."

Many financial experts recommend enough savings to cover three months of expenses, but very few people actually have that amount set aside.

"This is a rainy season, not just a rainy day," Storjohann said. "There's going to be more concern [in the future] about having that cash cushion."

Although the federal government has been sending out stimulus checks, a large portion of Gen Z will not get those checks, nor will their parents. California has made state resources available to help millions of people, but those benefits can take a long time to apply for and receive.

"[The future] will be [about] coming back to the basics," Storjohann said. "It will be [about] setting aside for the future, a reprioritization of what they are valuing."

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