The Covid-19 pandemic caused Americans to reevaluate their lives. About a third plan to live a quieter life and save more money. Twenty-four percent expect to splurge and make up for lost opportunities to travel, dine out, and do other things limited throughout the past year.
But overall, most Americans say the pandemic either didn’t impact their financial discipline or improved it. Fifty-seven percent said their financial discipline stayed the same and 32% say it improved, according to Northwestern Mutual’s 2021 Planning & Progress Study, a report based on a survey of more than 2,300 Americans by The Harris Poll.
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Many are confident the change is here to stay. Among the 32% whose financial discipline improved, 95% said they expect to maintain that improvement.
The same study found that one in five Americans didn’t have a financial plan but made one due to the pandemic. Meanwhile, 14% revisited an existing plan and made minor adjustments and 18% revisited their plan and made significant adjustments.
Even if a fraction sticks with the new plans and lifestyles, that might still equate to a material number of current or prospective wealth management clients suddenly thinking differently about family debits and credits.
Topping the list of new behaviors that 45% of Americans said will continue after the pandemic was a reduction in living costs and spending, for example, having fewer subscriptions, eating out less, and other ways. Thirty-four percent also plan to reduce or pay down debt.
Americans’ newfound financial discipline includes other behaviors, too. A third plan to invest more, 29% plan to regularly revisit their financial plan, and 28% plan to use more technology and digital solutions to manage their finances, according to the study.
But despite the increasing popularity of self-directed trading and investing, investors are not abandoning professional wealth managers in favor of going it on their own. Other studies have shown the opposite is happening and the Northwestern Mutual study suggests the same.
Among other new behaviors Americans plan to keep, 19% expect to continue receiving professional financial guidance.
Michael Thrasher (@Mike_Thrasher) is a reporter at RIA Intel based in New York City.