- Isolation may have changed our spending habits
- Marketing pushes products to us
- A look at the history of consumerism
- Falling household debt, increasing household savings
- Has the mindset changed? are we adapting an investment mindset?
The pandemic has isolated us from our friends, family, and shops. Our buying has been cut to essential items only, such as food and medicines. Have our spending habits and savings habits changed our consumer mindset?
What will happen when restrictions are lifted? will we all just resume our normal spending habits again? Will we go back to spending €4 for a coffee every day or €10 for lunch? I don’t think we will, I think there has been a small but drastic mindset change in consumerism. While we were sitting at home waiting out the restrictions, we learned to cook again, we learned the pleasures of a home cooked meal and we learned that we don’t need to go clothes shopping every week. Sure, we want to go out to a restaurant again and we want to spend our money again in order to feel good. However, this crisis has snapped us out of the blind consumerism that we were in and it may have quenched our thirst for buying something because we can and not because we need it.
Media and advertising agencies have pushed products and services at us at an alarming rate. Every one of them tugging at our emotional strings and playing with our deep-seethed psychology to entice us to move our hard-earned money from our account to someone else’s account. We have purchased goods since the invention of money, at first it was for a need of a product but now it seems to be more of a need of the feeling we get when we spend money.
According to the Irish Times “Irish households wealthier than even before Covid 19” They claimed that debt in Ireland has fallen by €331 Million over this quarter. “This equates to €27,386 per capita” that is a lot of savings per household. Now that we have a taste of what decreasing spending and increased savings look like, why would we want to go back to blind consumerism.
The only question remaining then is what are people doing with their savings? If the money is sitting in a bank account, will it be like a hot potatoe that we can’t wait to get it out of our hands. Maybe big ticket items such as car sales will increase rapidly once the restrictions are lifted. I hope not, I have nothing against the car industry but I really hope that people will learn from this emergency and start looking into investments and money management.
Apparently, Degiro has a backlog of over 5,000 new registrations and a waiting list that is weeks long. Does this mean that the people of Ireland are considering moving into investing instead of a savings account? Maybe they are looking at the drop in the markets and thought that it would be a good time to get in while the market is low. I am glad to see this many people opening an investment account but I really hope that they are doing it to invest long-term and not as a get rich quick scheme. Hopefully, they are focusing on diversification and allocation and they are not putting all their money into one stock because it is increasing in value.
Will consumerism evolve, we will have to wait to see.