COVID-19 restrictions

How the Pandemic Changed Investing Habits for Different Generations

In March 2020, the unrelenting spread of coronavirus resulted in a series of local and international shutdowns, business closures, and devastating health consequences. The pandemic eliminated millions of Americans. All these issues derailed the economy, leaving Americans reevaluating their personal finances. While almost everyone was trying to save, the younger generation’s emerging investing habits left economists wondering what the change meant for the future.

Let’s see how the pandemic changed the investing habits for different generations and the possible ways to reinforce the good habits and discard unsound ones.

Gen Z

Gen Z refers to the generation preceding Gen Alpha and succeeding millennials. The popular media and researchers say they were gen-zborn between the mid-to-late 1990s and the early 2010s. It’s important to note that these are the individuals that are widely considered to be more ethically and racially diverse than the previous generations. Moreover, they are on track to becoming the most educated individuals on the planet.

These attributes have influenced their behavior during the era of the COVID-19 pandemic. The age and experience show why researchers say the pandemic hit them hard.

According to Wells Fargo Private Banks’ regional wealth planning manager, more than 16% of Gen Z increased their savings for retirement since March 2020. Besides, they were paying off their credits, including student loans, at the height of the pandemic.

On the other hand, 15 % of these individuals started pausing their retirement contributions during the same period.


Millennials are the demographic cohort preceding Generation Z, and following Generation X. They were born between 1981 and 1996. The pandemic also hit them hard. Many of these individuals are have mind-level management jobs and are fully independent.

According to the regional planning manager for Wells Fargo Private Bank, 18 % started saving more for retirement during the same period.

Eight percent of them started pausing to save for retirement.

All Adults

We can compare the above figures with the change in the investment habits of adults. According to research from Northwestern Mutual, the saving rate among all adults rose from the onset of the pandemic. The data indicate that households saved a record 33.7% of their monthly income by April 2020. In the subsequent months, the savings rate hovered at about 20%.

The US Bureau of Economic Analysis indicates that the rate averaged 7.5% before the COVID-19 days.

In brief, a significant majority of fortunate Americans increased their saving rates during this time.

How to Maintain the Positive Investment Habit?

Some young people opted to skip saving for their retirement, as already indicated.

The overall savings increased, possibly due to fear and the uncertainty that accompanied the pandemic.

To overcome the negative effects of covid-19 and reinforce the positive investing behavior, everyone should consider:

Starting a side hustle: There are several options today. For example, you can start running Facebook ads for struggling businesses, tutor learners online, deliver food items to your customers, and offer freelance services like consulting and writing.

Take care of your health: Protect your health by focusing on the positives. Seek medical care whenever necessary.

Plan for the future: You should always save for retirement. A few of the best strategies for generating adequate money to save when nothing seems to work are putting debt under control and reducing your day-to-day expenditure.

Wrapping Up

The pandemic challenged the more fortunate members of Gen Z and millennials to up their savings game. However, those who lost jobs or dependents encountered lots of economic and psychological difficulties and could not save much. As we advance, all generations should plan for the future, take care of their health, and start side hustles to cushion themselves from any present or future pandemics.