Reducing COVID-19 risks: From hand-washing to emergency savings

Most of us are feeling overwhelmed by how the world is changing due to the COVID-19 pandemic.  In addition to upending our normal daily lives and putting those we care about at risk for getting really sick, the virus has also been hurting many of our bank accounts.  Many people have experienced reduced pay or even job loss because they can’t do their jobs from home, or are in industries hit hard by the social distancing measures, such as dining and travel.  Even those that have a financial cushion are worried as they watch the stock market continue to seesaw.

Despite all the uncertainty around us, there are many reasons to remain optimistic, such as an uptick in positive behaviors.

Improved Personal Hygiene 

For example, public health experts have been trying for decades to get us to wash our hands to prevent the spread of infection. Coronavirus has finally motivated us to wash as thoroughly and for as long (at least 20 seconds) as the experts recommend. People want to reduce their risks of spreading the virus, but making hand-washing fun and social has also helped increase this behavior.

The Overdue Return of Emergency Funds

Qapital Emergency Savings Goals

But people are not just trying to reduce health risks; they’re also looking for ways to reduce their financial risks.  Last year, it was estimated that up to 40% of Americans say that they would be unable to cover an unexpected $400 expense.  One way to mitigate financial shocks is to create a savings cushion, or an emergency fund, to allow you to cover unexpected costs.

Over the last few weeks, the proportion of new Qapital users creating an emergency savings goal has increased by 500%

Data from personal finance app Qapital indicate that many of its users are taking the financial impacts of coronavirus just as seriously as the potential health impacts.  Over the last few weeks, the proportion of new Qapital users creating an emergency savings goal has increased by 500% compared to the time period before the Coronavirus outbreak (from just 2.5% of users to more than 15%).  These emergency savings can blunt the impacts of future financial shocks and help give people some feeling of control over a difficult situation.

The COVID-19 crisis has made people connect emotionally to these risk-reducing behaviors.  While we hope that people continue these newfound health and financial habits once the crisis is behind us, we have to ask ourselves: will hand-washing or the increased attention to savings last?  Tragically, that depends on the length of this crisis: the longer the stress from COVID-19 sticks around, the better the chances that the newfound habits will stick around, too.

Margaret Bolton SENIOR BEHAVIORAL RESEARCHER