The Impact of Covid-19 Crisis on Consumer Financial Behavior in The Republic of Croatia
1. Problem statement: Individuals' financial behavior is affected by the level of their financial literacy, but also by the level of their exposure to various financial and macro economic risks. The Covid-19 crisis is an example of the materialization of the risk of an unexpected event that left significant consequences on the world as we know. It changed people's lives, habits, and behavior in an unprecedented way. The purpose of this paper is to determine the impact of the Covid-19 crisis on the financial behavior of consumers in the Republic of Croatia, with emphasis on personal consumption and emergency funds.
2. Methods: Using qualitative and quantitative methods, the authors present a brief outline of the origins of the Covid-19 crisis; discuss the role that savings, especially rainy day funds, play in the household resilience to the materialization of the risk of unexpected events, such as Covid-19; summarise the impact of the Covid-19 crisis on the financial behavior of consumers in Croatia, and explain why research of consumers' behavior is vital for finance researchers and practitioners.
3. Results: The results show that the financial problems caused by the Covid-19 crisis are more pronounced among consumers who do not have an emergency fund. However, thefearof Covid-19 does not increase the propensity of households to save for the rainy days. Interestingly, findings suggest that the pandemic did not cause the reduction of personal consumption. However, changes in the structure of household consumption are obvious; less money spent on restaurants, hotels, recreation, andculture, and more on food, home decoration, and health.
4. Conclusion: The findings indicate that the Covid-19 crisis affected the financial behavior and habits of most households in Croatia and increased their concern about their future.
Keywords – Financial Behaviour, Financial Habits, Emergency Savings, Personal Consumpsion, Covid-19, Personal Finances Risks