The KeyBank 2020 Financial Resiliency Survey finds that many Americans are now reporting greater financial confidence, increased emergency savings, and more financial awareness, compared to the beginning of the COVID-19 pandemic—an inspiring discovery considering the significant hardships faced by many over the past year.
The 2020 Financial Resiliency Survey polled more than 1,200 Americans on their financial feelings after nearly a year of living through a pandemic, finding that 53% felt more financially confident approaching the end of 2020, compared to the beginning of the year; 51% would be able to immediately have $2,000 available in an emergency, up from 42% in 2019; and 48% felt more financially aware, as a result of challenges they might have faced during the pandemic. Given the major toll that the pandemic has taken across the country —from lost income to sickness and loss of loved ones—Americans have demonstrated strength under pressure, ability to respond to a tough economic environment and resilience in the face of financial hardship.
Nearly half (41%) of respondents said they are spending less and saving more since the pandemic began, and among those who say they are doing so, 71% are spending less money on discretionary items—including travel, dining, and entertainment—which could be out of choice or necessity. Among those spending less, 14% say they are borrowing money from family or friends to help.
Still, 42% of respondents say they have not changed their spending habits during the pandemic, pointing to resilience in Americans’ confidence to spend.
“Many people are seeing their financial journeys disrupted by the pandemic, and they are taking action to keep a sense of financial normalcy and resiliency during a trying economic time,” said Chris Manderfield, executive vice president at KeyBank. “For Americans looking to stay resilient, it’s vital that they sit down with their trusted financial advisor—often, an offering by their bank—and evaluate next steps and financial support options, whether that means changing their spending to be able to save more or putting the money they’ve saved to use now.”
There are a wide range of factors that influence how Americans’ are finding their financial resiliency, with the top response being a good night’s sleep. The top three responses for feeling more financially resilient during the pandemic are getting enough sleep (38%), having access to financial information (36%) and using digital banking tools (35%).
“There is a clear connection between mental wellness and feeling financially strong. To support that connection, banking information and tools need to be delivered to clients with the ease that allows them to address their finances on their own terms,” said Manderfield. “We understand that each client and their circumstances are different and human-powered technology can contribute to their resilience, especially in tough times. That’s why KeyBank is investing in the function and security of our online and mobile banking and combining our digital tools with the expertise.”
When asked if they feel a greater sense of financial confidence as they approached the end of 2020, compared to the beginning of the year, 53% of respondents felt that was true, but confidence comes with a generational divide. Among Millennials and Gen Z (those age 35 and under), 60% felt a greater sense of financial confidence. Meanwhile, among those age 50 and over, 51% did not feel greater confidence. Part of this could be attributed to growing financial awareness among Millennials and Gen Z as a result of the pandemic, with 31% saying they felt they had become significantly more financially aware in 2020, compared to just 22% of all respondents.
With consumer spending habits changing because of the pandemic, financial “faux pas”—in other words, money missteps—are in decline, compared to last year. Overall, 50% of respondents admitted to committing some kind of financial “faux pas,” a 4% decline from the previous year. Breaking down “faux pas” by type gives us a clearer picture of what that looks like:
|Top 3 Budgeting Faux Pas
|Not Sticking to a Budget
|Spending Beyond my Means
One of the only rises in “faux pas” is a 3% year-over-year uptick in those who say they’re paying for subscription services they don’t use—from 22% last year to 25% this year—likely a result of people looking for more at-home activities and entertainment.
This survey was conducted online by Schmidt Market Research. 1,204 respondents completed the survey between Sept. 30 and Oct. 2, 2020. Target audience was between the ages of 18 and 70, and those who have sole or shared responsibility for household financial decisions.
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