How COVID changes the way we save

Data from Albert reveals big changes in millennial saving patterns

Jul 08, 2020 | Editorial | Spending trends | The economy
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How did COVID flip the savings script?

Contrary to what one might expect from millennials during a financially devastating pandemic, Albert users have stepped up their savings habits in a major way. Here's what the data says:

  • Average monthly savings rates have tripled since the pandemic began, as users brought their savings rates closer to $60/month.
  • However, during the first few weeks of safer-at-home measures, savings rates actually decreased.
  • The temporary savings dip is likely due to people stockpiling supplies in preparation for the long time spent at home.

Prior to the pandemic, Albert users consistently saved throughout the year, but on a smaller scale:

  • The average savings rate for users pre-COVID was about $20/month, with the only deviation being a holiday season splurge.
  • December is the only month of the year where savings became negative, as users withdraw funds for holiday-related expenses.

When stimulus checks came in, it drove saving to all-time highs:

  • User savings rates hit $118/month the week of April 16th.
  • This surpassed the next highest monthly rate on Albert by nearly a factor of two.
  • The spike is consistent with economic data for April when consumers saved nearly 33% of their income, up from 12.6% from the month before.

What does the surge in savings mean?

Generally, Albert users want to be prepared for the future.

  • As people face the prospect of sudden unemployment or reduced hours, they're looking to their savings as a way to insulate themselves from a future with potential financial turbulence.
  • Millennials, now experiencing the second major recession of their lifetimes, may want to be sure they're financially equipped to outlast not only this economic downturn, but the next one, too.

When Albert users get a windfall, they wind up saving much more.

During a recession, maybe save the avocado toast jokes?

  • After briefly stockpiling, Albert users hunkered down and tripled-up their savings rates, defying stereotypes about millennial attitudes towards money.

Millennials are just as eager as any other generation to save, but may rather do so through a different platform.

  • While only 6.9% of millennials used mobile banking in 2019, the proportional majority of 35-and-under users on Albert may indicate that an app may be a more enticing savings option than a bank in the coming decades.

Who's in the data?

Of the Albert users accounted for, nearly 80% were under the age of 35.

  • It's a marked contrast from traditional banks, where the average customer age is 47.
  • Only roughly 1 in 20 users covered in the data was over the age of 50 (although the tumult of 2020 has certainly made people feel older).
  • Roughly 30% are Gen Z (below age 25), while almost half of all users fell within the millennial age range.

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