Financial resilience increased last year despite COVID-19: study
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- Fifty-three percent of respondents had three months of emergency savings in 2021, up from 49% in 2018 and just 35% in 2009.
- Inactive workers had more financial anxiety and were much more likely to overdraw their checking account and fall behind on mortgage payments.
- Younger, less-educated adults and those who identify as African American or Hispanic/Latino were the most likely to experience unexpected drops in income.
In the United States, adults generally fared better in 2021 than in the decade before the pandemic, according to the FINRA Investor Education Foundation reported this week.
“Our study adds to a growing body of evidence that many American adults have been able to bolster their personal finances during the COVID-19 pandemic, despite the many economic disruptions it has unleashed,” said Gerry Walshthe president of the foundation, in a press release.
“At the same time, research shows that certain segments of the population that have historically struggled financially have continued to do so,” Walsh explained.
FINRA conducted a state-by-state online survey between June and October 2021 of 27,118 American adults, or some 500 per state plus the District of Columbia.
Fifty-three percent of respondents said they had three months of emergency savings in 2021, compared to 49% in 2018 and just 35% in 2009. Additionally, 54% said they had no difficulty cover their expenses and pay their bills, compared to 50% in 2018 and 36% in 2009.
But 20% of those surveyed said they were laid off or furloughed in 2020 or 2021 because of the pandemic, and 26% experienced a large and unexpected drop in income.
FINRA suggested that pandemic-related enhanced unemployment benefits and stimulus payments could explain some of the financial resilience documented in the study.
Fifty-nine percent of participants said they used stimulus funds to make purchases or pay bills. Many Americans added this money to their savings or used it to pay off debt.