Social Distancing Hurting Some Americans’ Finances

About 58 million Americans are spending more money while social distancing, despite being able to go out less, in large part because many people are participating in “comfort buying”—that is, shopping to relieve stress and boredom, a new survey suggests.

WalletHub surveyed 450 Americans and found 23% say they are spending more money because of social distancing. Forty-three percent report they’ve engaged in “comfort buying.”

Among those who are shopping to make themselves feel better, 35% say they have spent between $51 and $150, 22% have spent between $151 and $300 and 15% have spent more than $300. The non-essentials on which Americans are spending the most are entertainment (29%) and alcohol (23%), the survey found.

While millions of Americans are struggling to make ends meet because of the employment and economic impacts of the COVID-19 pandemic, the actions revealed by the survey go against what experts say they need to be doing. The pandemic has uncovered an overwhelming need for financial wellness.

“Too many people are already living paycheck to paycheck,” Brian Hamilton, vice president at Smart Dollar, previously told PLANSPONSOR. “American workers are up to their eyeballs in consumer debt. We’re spending more than we make. We have little to nothing saved, and we’re not putting money away for retirement.” He adds that when we get through the pandemic, “everything must change.”

Sources believe retirement industry professionals might soon see a significant shift toward emergency savings accounts, especially among the Millennial generation.