Stress-related to the pandemic isn’t limited to health concerns. In fact, financial security is one of the most significant concerns consumers had, especially during the months the economy was at its worst. But while managing spending and staying on top of bills was important, there were a few recurring mistakes consumers made that kept them from having financial independence. Because of these mistakes, organizations such as Priority Plus Financial realized money management was a challenge nationally. Here’s a closer look at the three financial mistakes consumers made during the pandemic.
- Not Making At Least Their Minimum Payments Monthly
Missing a credit card payment will drop your credit score by many points at once. The missed payment stays on your credit report for long enough to make an impact. Not making minimum payments extends the time you’ll have to pay back your debt. The longer it takes to pay off credit card debt, the more swamped consumers were when it came down to affording pandemic necessities.
Consumers had to pay higher amounts thanks to the addition of late fees. In many unfortunate cases, Americans fall behind. In the future, these consumers will struggle to find themselves independent, forced to seek more and more assistance to keep up with skyrocketing costs. Not paying credit card bills on time every month did Americans more harm than good. But lack of concern, not hardship, had the most profound effect of all.
- Excessive Spending on Entertainment and Electronics
Despite overwhelming financial insecurity, news reports cite research indicating that Americans spent a great deal on entertainment during the pandemic. Quarantine and depression made people feel lonely across the country. So, splurging on a new Playstation 5 or the latest smart television may have seemed like a worthwhile decision. The research shows that 16.2% of consumers spent money on electronics, with 31% spending on books and streaming, and 14.7% spending on toys and board games. Unfortunately, the latest technology needed to be lower prioritized during the pandemic. The money consumers spend on entertainment and electronics? That was money needed for an emergency fund. Too much spending on entertainment was a mistake American consumers continue to regret.
- Overspending on Pandemic Necessities
Interestingly, plenty of news stories revealed people who hoarded pandemic-related necessities. Overall, hoarding increased because consumers felt lonely and out of touch with others. Often, stocking up on too much was done to the detriment of fellow citizens who couldn’t get enough. But ironically, while consumers who overspent on pandemic necessities might have had plenty of paper towels, hand sanitizer, and toilet paper, the spending hurt their bank accounts in the event that many necessities weren’t needed after all. Many consumers had pantries and closets stockpiled with items they thought they needed. Many more regretted not spending that money on something more important, like paying down credit card debt or starting an emergency fund. In the end, the extra money spent on pandemic necessities might not have even been worth the cost. Clearly, this was a mistake for American consumers.
Overall, financial mistakes were made. Getting out of pandemic debt means overcoming those mistakes, learning from them, and not making them again. Consumers who wish to have more financial independence must make the smartest choices for long-term financial security. In a world where a pandemic can be so devastating, Priority Plus Financial is a resource. Having financial security may be one of the best advantages of all.