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Anecdotal but my spending habits changed a lot during lockdown and it's been an uphill battle to get them back to normal. There was a period there where we wer

Anecdotal but my spending habits changed a lot during lockdown and it's been an uphill battle to get them back to normal. There was a period there where we were flush with valuable cash that you wanted to just spend, just for the dopamine hit in some cases, but also because you knew the cash was going to be worth less over time. Getting stimulus checks was a bit of a mindfuck too. We still shop almost exclusively on our phones, and it's so easy to just "add to cart" and have someone put it in my trunk or drop it at my doorstep. Cut to a few years later and the cost of things has risen faster than my income and my brain is still "COVID rich", I can see why credit card balances are higher and defaults are more common.

lowercased 2y ago
That seems odd. I got stimulus checks too, but I never once felt "covid rich", and my spending patterns during 2020-2023 hardly changed at all.
- Lord_Zero 2y ago
  To a lot of people that was more money they have ever had all at once that wasn't immediately eaten up by bills.
- jopsen 2y ago
  Stimulus checks might affect some income levels more than others. And some people more than others.
gnatolf 2y ago
This is such an odd take
skybrian 2y ago
If you're worried about inflation, why not invest the money?
- jimmytucson 2y ago
  Oh, I definitely did invest some of it (if you can call playing with cash in a brokerage account investing), and seeing some of the returns I got made me feel even richer. I should stress that I am not a totally rational or irrational actor, I'm pretty much average intelligence, and this is one person's anecdote.
chung8123 2y ago
It is very hard to cut spending. This is why when you get a raise they say to not raise your living costs. I am sure this has been studied but going from even temporary luxury back to normal spending is tough.
yulker 2y ago
How does $2k spread across a couple of checks make people feel they were "COVID rich" is something I just can't wrap my head around. Even for someone with a low income this would amount to at most a paycheck or two extra
- jimmytucson 2y ago
  It wasn't just the stimulus checks, it was also the increase in income from job hopping, seeing my 401k and brokerage accounts explode, etc. I'm not saying it was rational or that stimulus checks weren't a good idea, I'm just reflecting on my own personal psychology. Not surprised it doesn't match everyone's!
- deleted 2y ago
  [deleted]
- chrisweekly 2y ago
  citation needed by me (sorry) but a few years ago I was surprised by an apparently validated assertion that something like 60% of all US households would be unable to come up with more than $2k cash given a month's time
  - whaleofatw2022 2y ago
    I believe it. Happened to me once or twice when I was making under 50k/yr over a decade ago.
  - jeffbee 2y ago
    I think what you wanted to cite is "Financially Fragile Households", Lusardi et al, 2011. But, instead of getting the conclusion from the opinion page of the WSJ it would probably be better to read the paper and especially the notes by reviewers at the end of the article, particularly the comment of Pence which is almost a rebuttal.
  - conductr 2y ago
    $2k is massive sum for most US households. Many are a flat tire away from bankruptcy, they lean on cash advances and their communities to help them through simple things like a flat tire. I grew up kinda poor and lived this as a kid, my family was always helping or being helped by a neighbor or something. Through my friends and some extended family I knew these things were like a sign of our “class” and even slightly more secure people would never do them, it would even be a social faux pas to even ask for help. Now, at middle aged, I’ve done pretty well for myself and sometimes make other types of faux pas statements like “just buy a new car instead of dealing with that”. I have to be somewhat mindful that even a 10 year old used car is a huge purchase for many people. Even if it’s in good shape and can get another 5-10 years out of it, and would technically be the best move, it’s not viable if they can’t afford it or have to subject to some usurious loan. TBH I generally like to just take the “it’s impolite to talk about money” approach unless I know the person well enough. Although I’m a financial professional so people tend to like asking my opinion/advice on a lot of things, even if I barely know them, I have found that I prefer to avoid those types of conversations altogether until I know you pretty well.
alistairSH 2y ago
Opposite experience here. We spent a ton LESS during COVID. No stimulus for us, but lots of cancelled travel. Did some light home reno, but nowhere near enough to offset reduced spending on travel, dining out, and other entertainment.
reaperducer 2y ago
Cut to a few years later and the cost of things has risen faster than my income and my brain is still "COVID rich", I can see why credit card balances are higher and defaults are more common. Add to it the rise of buy-now-pay-later schemes like Klarna and Affirm, which for a long time would allow you to make your payments with a credit card, allowing people to run up more debt faster than ever before. It's my understanding† that making payments with a credit card is no longer permitted, so now these companies are pulling cash out of already over-extended people's checking accounts, keeping them from paying their credit cards. Fintech wins. Traditional credit cards lose. Human beings lose harder. † I have never used any of these services, but I know people who have, and it all sounds like loan sharking to me.
- whaleofatw2022 2y ago
  Klarna/affirm do often seem to be the thing I see 'not financially stable' folks use. Most recent example being someone considered an 'adult child' of the state and on SSDI that used Affirm to pay for some xmas presents. > It's my understanding† that making payments with a credit card is no longer permitted, Ive never used them myself either but it would surprise me if they allowed credit cards for payment ever. In my head they were trying to make their money back on the loan via the merchant rate 'padding' (i.e. usually 1-2% of the item price). Which of course, in this non NZIRP/ZIRP climate means they have to find other ways of making/saving money... (didn't klarna just do a layoff?)

lowercased 2y ago

That seems odd. I got stimulus checks too, but I never once felt "covid rich", and my spending patterns during 2020-2023 hardly changed at all.

Lord_Zero 2y ago
To a lot of people that was more money they have ever had all at once that wasn't immediately eaten up by bills.
jopsen 2y ago
Stimulus checks might affect some income levels more than others. And some people more than others.

gnatolf 2y ago

This is such an odd take

skybrian 2y ago

If you're worried about inflation, why not invest the money?

jimmytucson 2y ago
Oh, I definitely did invest some of it (if you can call playing with cash in a brokerage account investing), and seeing some of the returns I got made me feel even richer. I should stress that I am not a totally rational or irrational actor, I'm pretty much average intelligence, and this is one person's anecdote.

chung8123 2y ago

It is very hard to cut spending. This is why when you get a raise they say to not raise your living costs. I am sure this has been studied but going from even temporary luxury back to normal spending is tough.

yulker 2y ago

How does $2k spread across a couple of checks make people feel they were "COVID rich" is something I just can't wrap my head around. Even for someone with a low income this would amount to at most a paycheck or two extra

jimmytucson 2y ago
It wasn't just the stimulus checks, it was also the increase in income from job hopping, seeing my 401k and brokerage accounts explode, etc. I'm not saying it was rational or that stimulus checks weren't a good idea, I'm just reflecting on my own personal psychology. Not surprised it doesn't match everyone's!
deleted 2y ago
[deleted]
chrisweekly 2y ago
citation needed by me (sorry) but a few years ago I was surprised by an apparently validated assertion that something like 60% of all US households would be unable to come up with more than $2k cash given a month's time
- whaleofatw2022 2y ago
  I believe it. Happened to me once or twice when I was making under 50k/yr over a decade ago.
- jeffbee 2y ago
  I think what you wanted to cite is "Financially Fragile Households", Lusardi et al, 2011. But, instead of getting the conclusion from the opinion page of the WSJ it would probably be better to read the paper and especially the notes by reviewers at the end of the article, particularly the comment of Pence which is almost a rebuttal.
- conductr 2y ago
  $2k is massive sum for most US households. Many are a flat tire away from bankruptcy, they lean on cash advances and their communities to help them through simple things like a flat tire. I grew up kinda poor and lived this as a kid, my family was always helping or being helped by a neighbor or something. Through my friends and some extended family I knew these things were like a sign of our “class” and even slightly more secure people would never do them, it would even be a social faux pas to even ask for help. Now, at middle aged, I’ve done pretty well for myself and sometimes make other types of faux pas statements like “just buy a new car instead of dealing with that”. I have to be somewhat mindful that even a 10 year old used car is a huge purchase for many people. Even if it’s in good shape and can get another 5-10 years out of it, and would technically be the best move, it’s not viable if they can’t afford it or have to subject to some usurious loan. TBH I generally like to just take the “it’s impolite to talk about money” approach unless I know the person well enough. Although I’m a financial professional so people tend to like asking my opinion/advice on a lot of things, even if I barely know them, I have found that I prefer to avoid those types of conversations altogether until I know you pretty well.

alistairSH 2y ago

Opposite experience here. We spent a ton LESS during COVID. No stimulus for us, but lots of cancelled travel. Did some light home reno, but nowhere near enough to offset reduced spending on travel, dining out, and other entertainment.

reaperducer 2y ago

Cut to a few years later and the cost of things has risen faster than my income and my brain is still "COVID rich", I can see why credit card balances are higher and defaults are more common. Add to it the rise of buy-now-pay-later schemes like Klarna and Affirm, which for a long time would allow you to make your payments with a credit card, allowing people to run up more debt faster than ever before. It's my understanding† that making payments with a credit card is no longer permitted, so now these companies are pulling cash out of already over-extended people's checking accounts, keeping them from paying their credit cards. Fintech wins. Traditional credit cards lose. Human beings lose harder. † I have never used any of these services, but I know people who have, and it all sounds like loan sharking to me.

whaleofatw2022 2y ago
Klarna/affirm do often seem to be the thing I see 'not financially stable' folks use. Most recent example being someone considered an 'adult child' of the state and on SSDI that used Affirm to pay for some xmas presents. > It's my understanding† that making payments with a credit card is no longer permitted, Ive never used them myself either but it would surprise me if they allowed credit cards for payment ever. In my head they were trying to make their money back on the loan via the merchant rate 'padding' (i.e. usually 1-2% of the item price). Which of course, in this non NZIRP/ZIRP climate means they have to find other ways of making/saving money... (didn't klarna just do a layoff?)