New survey finds increased financial confidence, pandemic savings and renewed spending are changing financial habits among young Americans
New York, NY — August 25, 2021 — Almost six in 10 Gen-Z and millennials feel more financially confident now than before the pandemic first began, and have become more financially responsible, according to a new survey from Laurel Road, a digital banking platform of KeyBank with specialized offerings for healthcare and business professionals.
Uncovering new spending and saving habits of young Americans during the ongoing pandemic, the survey, which polled 2,000 Gen-Z and millennial Americans, found that nearly seven in 10 (69%) are getting back to spending money on things they missed due to COVID-19. And according to the survey, three in four are focusing their spending on activities that allow them to catch up with friends and family.
This may be linked to increased savings for many Gen-Z and millennials, as 61% noted they have saved at least $1,000 from the start of the pandemic through the start of summer 2021. This group plans to use these savings on making student loan payments (38%), going on vacation (37%), paying rent (32%) and making payments on their credit cards (29%).
“It’s encouraging to see that young Americans are feeling more financially confident throughout what continues to be a very difficult and challenging time, and that so many are focused on maintaining their hard-earned savings,” said Alyssa Schaefer, Chief Experience Officer at Laurel Road. “Importantly, we see from our survey that many are balancing using their savings to both benefit their long-term goals, including paying off their student loans, and have fulfilling personal lives — a balance that is necessary for a strong financial future.”
Financial Balancing Act: Spending Habits are Changing, but Savings Goals Remain
When COVID-19 restrictions initially lifted and re-openings began in early summer, Gen-Z and millennials took advantage by spending money on vacations (51%), their favorite bars or restaurants (49%), going on dates (43%) and concerts or music festivals (30%). This spending has led six in 10 respondents to report they believe they are spending more money now than before the pandemic, and 58% to create new savings goals because their spending habits have changed.
Still, two-thirds (66%) of this group feels confident they can achieve their savings goals moving forward. This may be due to how they have shifted their approach to personal finance, with Gen-Z and millennials noting they are now budgeting for the first time (31%), using a new method of budgeting (40%), creating new savings goals (31%), and planning to pay off student loans (20%).
Learnings from COVID-19 may also have inspired these changes, given that respondents noted that budgeting (21%) and increasing savings (10%) were top financial lessons they learned during the pandemic. In fact, just over one in five (22%) Gen-Z and millennials noted that if they had an extra $1,000 to spend for the rest of 2021, they would put it in their savings account.
Young Americans Are Still Preparing for Student Loan Forbearance to End
Within this survey, 2,000 Gen Z and millennials were polled to find out more on how they’re navigating and potentially utilizing the federal student loan forbearance period, as well as preparing for its end in January 2022.
Of those with private student loans, three-quarters (75%) have arranged for forbearance due to the pandemic, and 73% of those with federal student loans also utilized the federal forbearance period to pause payments. Notably, 77% of respondents with private student loans feel prepared to start making payments again once their forbearance ends, compared to 62% of those with federal student loans. Importantly, both groups have a plan once the forbearance period ends, as 32% of those with private student loans and 44% of those with federal student loans plan to refinance and lower their monthly payments.
“With many borrowers continuing to prepare for the student loan forbearance period to end, the survey shows an understanding of the benefits of refinancing student loans,” Schaefer added. “Specifically, refinancing is a great option for those looking to save over the life of their loans, creating opportunities to use that additional money to achieve savings goals as well as some much-needed fun and self-care.”
These results were taken from a random double-opt in survey of 1,000 Gen Zers (respondents aged 18-24) and 1,000 Millennials (respondents aged 25-39) conducted by OnePoll and commissioned by Laurel Road between July 16, 2021 and July 23, 2021. An additional random double-opt in survey of 1,000 Gen Zers (respondents aged 18-24) and 1,000 Millennials (respondents aged 25-39) conducted by OnePoll and commissioned by Laurel Road took place between August 11, 2021 and August 16, 2021. OnePoll is a corporate member of the AAPOR and adheres to the AAPOR Code of Professional Ethics and Practice.
About Laurel Road
Laurel Road is a digital banking platform and brand of KeyBank that provides tailored offerings to support the financial wellbeing of healthcare and business professionals. Laurel Road’s banking and lending solutions, including High Yield Savings℠ Account, Student Loan Cashback℠ Credit Card, Student Loan Refinancing, Mortgages, Personal Loans and more, provide our members with a simplified, personalized experience that helps them better navigate their financial journey and achieve life’s goals. Additionally, Laurel Road has reimagined banking and financial management for physician and dentists through Laurel Road for Doctors, a tailored digital experience made up of banking, insights and exclusive benefits to provide the financial help and peace of mind they need through each career stage. Since 2013, Laurel Road has helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $9 billion in federal and private school loans. For more information, visit http://www.laurelroad.com. Laurel Road is a brand of KeyBank National Association. All products offered by KeyBank N.A. Member FDIC. NMLS # 399797. Equal Housing Lender. © 2021 KeyCorp® All Rights Reserved. Laurel Road is a federally registered service mark of KeyCorp.