KARACHI: They may be among those fortunate ones who have the lowest rate of catching the coronavirus, but the pandemic and the lockdown has come with its own set of burden for the millennials. For one, it has changed the way they spent their earnings pre-pandemic.

“Being at home has made me realise I can do a lot of things myself and save money,” said Karachi-based 30-something Khadeja Shah* (name changed on request) working in a multinational company.

“So workout, salon and even spending money on food is something I don’t think I’ll be indulging in anymore,” said the young lawyer. “Why waste money when you can do many things at home; plus, I’d be too scared to go out for these services anyway!” she said.

With cuts in eating out, clothes, salon services and fuel, she said she’s already “saved a lot of money in the last two months”. And it will be “more saving, and less spending this year” now that her employer has indicated no bonus or pay increase this year. And if an increment happens at all the following year, it will be “minimal”.

Spending overall has reduced but spending by young people has seen a huge shift. Hysab Kytab, a personal finance manager start-up in Pakistan, akin to Mint, Spendee and MoneyLover, carried out a study to calculate how the lockdown enforced on March 23 impacted on consumer spending.

‘Why waste money when you can do many things at home?’

“Millennials were known to live today and think tomorrow, they are the generation that spends a lot on travel, gadgets, fashion etc,” said Javeria Haseeb, co-founder and marketing lead of Hysab Kytab, owned by Jaffer Business Systems. “This has to be the biggest change that we are witnessing and consumer behaviour is bound to have a lasting impact. It will change how they spend and more importantly it will change how they prioritize their savings,” she said.

Interesting stats

The start-up found a 58 per cent increase in the amount spent on groceries with 10pc additional increase during Ramazan. Eating out declined by 70pc and declined further by 20pc in Ramazan. There was a 31pc decline in money spent on fuel and transport but has increased by 16pc since the lockdown eased. Online shopping has witnessed a constant increase as has spending on telecom. For example, in February 48pc was spent on home entertainment giant Netflix and in March it jumped to a whopping 108pc. It has now steadied to 56pc. Charity increased by 324pc during lockdown but has now witnessed a very slight decline of 3pc.

The study found that spending on eating out, which was previously a constant upward trend, suffered the sharpest decline. About expenditure on telecom, with young people working from home or spending more time at home, the need for internet and increased usage of mobile phones was expected. BBC reported that Netflix reported 16 million new subscribers in the first three months of the year.

But along with change in behaviour, Haseeb predicted an acceptance for technology. “We will see e-commerce doing better than before,” and gave the example of banks moving their focus on making the digital experience of their users “better and simpler”.

“We want to help these young people live the lifestyle they want while staying within their budgets,” said Haseeb. “The idea is to help them become smart but guilt-free spenders who also set aside a part of their income,” she added.

Young Shah said she had no idea where her “hard-earned money” went till her father walked her through her expenditure. “It was a lot for someone who doesn’t run the house ... and has basics provided for,” she said. After that she decided to keep an Excel sheet. “But I could only manage that for a month, coming home and putting in your daily expenses can be tedious,” she said and so that’s why I think the app would be a good idea,” she said.

Published in Dawn, May 28th, 2020