The importance of savings and the effect of the pandemic

As teenagers in high school, we are all just discovering what it means to make money and how great of an importance it really is to save it up. Having sufficient savings can help in times of great need – something that a majority of the country has learned the hard way this past year. Through the ups and downs of the pandemic, the American population, especially millennials, have observed what happens during a nation-wide quarantine when you have savings built up, and what happens when debt supersedes savings, and you have no job to return to.

A clear demographic divide regarding American savings emerged at the beginning of the pandemic last March 2020. The wealthy were able to use their excess savings to pay off debt, the excess of savings coming from lack of travel and other restrictions due to the pandemic. Meaning that those who received stimulus checks, and did not necessarily need them, were able to put the money into stock and other extracurricular means. Meanwhile, lower-income citizens realized that they did not have enough in their savings pre-pandemic in order to provide for themselves and their families during this troubling time. These are the people that would have greatly benefited from the stimulus check and were unfortunately not given enough to live off of. 

Now for the group of citizens most similar to high school students, it has been observed that both millennials and women have been more likely to have credit card debt than savings. Millennials are clearly a group with one of the fastest-growing debts, and it has been seen throughout the pandemic that having too much debt becomes a severe problem when the access to employment is slim. There has been a clear impact of job losses and closures in lower-wage areas like those in travel and retail, which commonly employ minorities. 

When the state of the world becomes gray, and the future is something unpredictable, it becomes a better idea to make sure that you have savings in place at all times. It might have been doable to get by with debt pre-pandemic, but it has been evident over the past year that the millennials with too much debt have struggled, and those with a good amount of savings have been better off. A lot of high school students have jobs, and just acknowledging to save even a small amount of each paycheck can create better habits for the future, especially as some of us are entering this next chapter of our lives into the outside world.

Categories News

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