Spending, saving and investing were all affectedA recent survey from Joy Wallet, a consumer credit & banking site, measures the financial impacts of COVID-19. Access the report here.
Feb. 23, 2021 /PRNewswire/ — A new survey from Joy Wallet reveals how the COVID-19 pandemic has impacted personal finances of Americas. Nearly 400 adults across the U.S. answered a series of questions about the pandemic and their personal finances.
Results of the survey found 73% of respondents are still employed and 5% were able to find a new job during the pandemic. But the unemployment rate found in our survey was higher than the national average with 21% not working.
Finances were definitely impacted by the pandemic with more than 64% respondents needing to dip into savings in order to get by. Although nearly half cut their spending during the crisis, a quarter of those surveyed found themselves spending even more. A surprising 25% admitted they were unsure of their spending habits. Those who spent less were both financially forced to and had fewer ways to spend their money with lockdowns and changes in entertainment, travel, dining and other COVID-imposed shutdowns.
Taking another hit due to the pandemic? The ability to save money. Nearly 38% were unable to put aside any money into savings vehicles. The division of respondents investing, however, was nearly even.
It may be too soon to tell how COVID may have a long-term effect on the finances of respondents, although 25% claim the changes in their finances during the pandemic have permanently altered their financial habits.
Excerpts From The COVID Impact Survey
- More than 1 in 5 Americans are currently unemployed
- Almost 65% of people have had to dip into their emergency fund or savings during the pandemic
- Nearly 50% of people have spent less during the pandemic
- 25% of consumers don’t know their spending habits
- 63% of Americans have found ways to save money over the last year
- Over 50% of people have not been able to invest their money into the stock market
Are you still employed or did you lose your job during the pandemic?
In the first few months of the pandemic, 22.2 million jobs were lost when the country went into lockdown to curb the spread of the COVID-19 virus, according to the U.S. Department of Labor. By August, only 42% of those jobs were recovered.
As we approach a full year since those initial lockdowns took place, the U.S. unemployment rate is around 3.5%, after a steady decrease from the 14.7% high reached in April 2020. Still, 19.2% of those have been jobless for 27 weeks or more, again as reported by the Labor Department.
Have you dipped into your savings or emergency fund during the pandemic?
Savings accounts are one of the first steps in reaching financial freedom, with financial experts recommending having an emergency fund with 3 to 6 months of your financial income set aside to help prevent dipping into other savings vehicles during the time of an economic crisis in your household.
Yet prior to the pandemic, the Federal Reserve Board found that 12% of Americans couldn’t handle a $400 emergency and another 27% would have to borrow or sell something to cover it.
Of those surveyed in Joy Wallet’s review, more than 64% had to dip into their savings in order to get by during the pandemic. Each time they dipped into their savings, they were taking funds from their goals, whether those are retirement-driven, or for big-ticket expenses such as getting married, buying a home, or putting a child through college.
Have you been investing during the pandemic (in stocks, real estate, mutual funds or other vehicles)?
Also valuable to reaching retirement goals faster is investing. The pandemic caused an initial stock market crash in March 2020, with the Dow Jones Industrial Average dropping 6,400 points in a 4-day period alone. By September, however, the Dow closed in on its February 2020 high, bouncing back from the initial downturn.
While the wild ride may have left investors nervous, the split between Joy Wallet participants showed nearly half were still investing in the stock market, mutual funds, real estate and other vehicles at the start of 2021. A wise move as investing is deemed a long-term growth plan.
Read the full article and see more results: COVID’s Impact on U.S. Employment Survey (2021) here.
About Joy Wallet
Joy Wallet, established in 2020, is a website dedicated to enabling others to take control of their finances. It provides readers with useful information, resources and tools to help readers maximize their financial fitness, covering topics on banking, investing, credit cards, mortgages and loans, retirement, insurance and much more. This survey of 395 Americans took place February 9 – 16, 2021. Learn more at JoyWallet.com.