Pandemic Bolsters Financial Acumen

Tue, 12 January 2021  |  debt credit cards 

COVID-19 might have permanently changed how an entire generation thinks about spending, saving, and debt – and in ways that might offer a silver lining to a devastating pandemic, says Jean Chatzky, best-selling author and CEO of HerMoney.com. HerMoney partnered with Debt.com and polled more than 1,000 working Americans about their financial habits as the pandemic dragged on into December.

The results were surprising and profound:

While most Americans do not have an emergency fund, more than 8 in 10 of those who lost money due to the pandemic told HerMoney and Debt.com, "I now realize how important it is to save money for emergencies."

Credit card debt has long topped $1 trillion in this country and was trending up before the pandemic, but the survey shows nearly 1 in 5 people say, "I'm paying more attention to the interest rates on my credit cards."

Nearly 1 out of 5 now rethink how they make large purchases, saying they're more willing to buy used cars and other pre-owned big-ticket items.

A quarter of American adults have nothing saved for retirement, according to the U.S. Federal Reserve, but only around 15 percent of survey respondents reported, "I'm not ignoring retirement savings like I once did."

Other survey findings:

• Over 34 percent of respondents lost at least a quarter of their household income
• Of those who lost income, 94.6 percent cut their spending by at least 25 percent, while only 5 percent say they are still spending just as much as they did pre-pandemic.
• Almost 30 percent admit to finally sticking to a budget, even though they had made a budget in the past and did not stick with it
• Approximately 45 percent of respondents feel that President-Elect Biden will be good for their finances

Source: Debt.com