52% of Americans Will Be Forced to Borrow Money If Second Stimulus Isn’t Passed
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Americans are contributing less to their 401(k), spending more money on unhealthy habits, and regret not cutting expenses sooner in the pandemic.
» 40% of Americans report worsening finances as a result of COVID-19. » 52% will need to take on debt if Congress does not approve another stimulus package. » 56% are delaying a major financial decision due to COVID-19. » 35% reported making a financial decision they regret since the pandemic started. » Most common regrets: Not cutting expenses sooner, and not spending first stimulus check wisely. » 18% of Americans who had no credit card debt in 2019 now have recurring credit card debt in 2020. » 31% have reduced 401(k) contributions since the pandemic began. » 32% have adjusted their 401(k) investment allocations at least once since the pandemic began. » 31% say they have increased spending on unhealthy habits in 2020. » 74% support increasing the national debt to support additional stimulus packages. » 52% favor Joe Biden to lead an economic recovery from COVID-19 in the United States. » Nearly 50% of people wouldn’t spend more than $50 out-of-pocket on a COVID-19 vaccine. The classic “3-6 month emergency fund” advice that is passed around isn’t enough anymore. Income diversification is just as important. It’s been over 6 months since the COVID-19 pandemic was declared in the United States. For many that have taken even the most aggressive approach to saving a long-term emergency fund, it likely won’t be enough to stave off liquidity issues. While it’s not entirely realistic to expect most people to save a year’s worth of expenses (or more) for a rainy day — on top of saving for retirement — the pandemic has shown that many people need to have a backup plan for earning income. In addition to an emergency fund, people need to develop emergency income streams that they can tap into during difficult times. Even the most money-savvy people are struggling this year. No one is alone. It’s not just the paycheck-to-paycheck, overspending crowd that’s in trouble. Nearly one in five people who did not carry credit card debt in 2019 now have a recurring credit card balance. These are people that know how harmful this type of high-interest debt is, yet couldn’t avoid it this year. To be fair, credit card companies often get a bad rap, but they have been a lifeline to millions of Americans this year. The priority is making it through the pandemic — at the expense of our long term future. Between delaying major financial decisions, cutting back retirement contributions, and even increasing “sin” spending as a coping mechanism, it’s clear that the main priority for many is to simply make it through the pandemic. 74% of people support increasing the national debt to fund an additional stimulus package, which suggests a rare bipartisan agreement that we need to do whatever we can to make it through our current situation. Key Findings:
What It All Means
