Americans Spending More on Local Travel but Less on Eating Out
Amid a pandemic that has helped some Americans stash more in savings, how are consumers spending their money?
According to a survey from global management consulting firm L.E.K. Consulting, consumers plan to spend more post-pandemic on traveling locally by car, cooking homemade meals and doling out cash on smart home devices, electronics, streaming entertainment, pet supplies, vitamins and personal care.
On the flip side, they’ll spend less on eating out at restaurants, taking ride-sharing services and taxis, and going to the movies, sporting events and live entertainment.
How stimulus checks are being spent
According to the mid-April survey of more than 1,000 respondents, a fair share of Americans said they plan on using their economic impact payments — also known as stimulus checks — to increase their savings (43%) or pay down debt (20%). Though this money started going out in mid-March, the IRS has until Dec. 31 to distribute this third round of stimulus funds.
Another 20% said they’ll use the funds toward monthly essentials, including:
- Groceries (75%)
- Personal care products (51%)
- Apparel, footwear and accessories (35%)
- Dining out (33%)
- Vitamins, minerals and supplements (33%)
But not everyone is using the money for basic needs. Nearly 1 in 10 (8%) say they’ll use the money for discretionary purchases.
A different spin on traveling for fun
Survey respondents reveal they plan to do more leisure travel after the pandemic, but how they do it will be a bit different.
After the pandemic, Americans intend to increase the money and/or time they spend on traveling for fun by 6%. Younger consumers (7%) appear to be slightly more willing to spend more on travel post-pandemic.
So, what will change among the types of leisure travel activities? Compared with pre-COVID-19, 29% say they’re more interested in driving, 26% say they’ll seek out activities that offer greater social distancing and 21% say they’re interested in new activities that they wouldn’t have previously considered.
A shift toward returning to in-store shopping
While the pandemic sped up the pace of the adoption of online grocery shopping, more consumers are returning to stores post-crisis. Nearly 9 in 10 (88%) bought groceries in-store pre-pandemic, while 73% did so during the pandemic. This figure will settle in the middle, as 80% will go back to in-store shopping post-COVID-19.
And 28% of Americans intend to do more home cooking post-pandemic, with the top reasons being health, saving money and enjoyment.
However, not everyone expects the domestic life they adopted during the pandemic will be an enduring one. About 2 in 5 Americans (17%) say they expect to cook at home less frequently after the pandemic.
Tips on how to best use money saved
As the trend toward spending less and saving more seems to continue for some Americans, those looking to focus on emergency savings and crushing their debt can do so by finding additional ways to save. In turn, they can free up cash to put toward an emergency fund or debt repayment.
A general rule of thumb is to have some emergency savings before aggressively paying off debt. Otherwise, you might run into the danger of digging a deeper debt hole.
If you’d like to save money on your debt, you might do so through debt consolidation. By lumping your existing loans into a single one, you’ll simplify your payments — and you might get locked into a lower interest rate.
Methodology: L.E.K. Consulting, which has six offices across the U.S., fielded a survey of nearly 1,000 American consumers, conducted April 21-23, 2021.