New research on the COVID-19 pandemic’s financial impact compiled by real estate listing service Clever suggests many Americans are still struggling with payments and savings, more than six months since the outbreak began.
Out of 1,500 Americans asked about their financial stability and spending habits in early September, 61% said their emergency savings had run out or would be exhausted before the end of the year. Americans were 27% more likely to live paycheck to paycheck now than before the pandemic.
Earning six figures did not render immunity to financial trouble either: Clever found 42% of those polled with a household income over $100,000 were living paycheck to paycheck in September.
Mass unemployment and widespread pay cuts also resulted in about three-quarters of those surveyed seeking additional means of incomes, taking on credit card debt, digging into their savings or cutting their spending to cover their living expenses.
Respondents were most frequently concerned about keeping their jobs and being able to pay routine bills and unexpected expenses, and most often regretted not having enough emergency savings.
The vast majority of those surveyed — 84% — reported losing sleep since the onset of the pandemic for various reasons including fear of the disease itself, the current state of the world, the safety of their children or family and loss of income.
“While initially counterintuitive, Americans tend to spend most of what they earn regardless of their income levels, and few do a good job of saving for the future,” Clever said in its report, characterizing the average American’s approach to savings as “notoriously bad.”
Of Americans surveyed, 16% said they had already spent their reserves as of September. About 40% anticipated their savings would run out in less than a year. Nearly 21% of respondents said they never had emergency savings.
“The sudden fall into an economic recession was a wake-up call for many Americans who were not financially prepared to deal with unemployment,” Clever observed.
“Americans’ biggest financial regret is not having enough in savings going into the pandemic.”
Consumer confidence tanked during the initial outbreaks in April and March, at which point many Americans feared a repeat of the Great Recession at best or a downturn to rival the Great Depression at worst.
But if there is a silver lining, it’s that the economy appears to have bottomed out: Nearly half of the 30 million jobs lost between mid-March and late April have since recovered and the stock market has rebounded.
Clever, citing statistics from the Organisation for Economic Co-operation and Development, found confidence never reached the lows of the Great Recession.
Americans are still struggling financially, Clever wrote, but aren’t as worried about their finances now as they were in April — though they cautioned that any recovery is likely to be sluggish, not unlike 2008.
“Even with Great Recession rebound speeds, we should expect spending to reach prerecession levels approximately one year after the recession ends,” the report said.
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