Despite the financial strain brought on by the COVID-19 pandemic, Americans spend four times longer on social media sites than managing finances, according to a new study from financial services firm TIAA.
Social media also influences how Americans make financial decisions. While 63% say financial services providers’ online tools are the most trusted resource for information, one in five feel that social media content is also a go-to resource. One-third say they trust social media content to help them make financial decisions, and 32% say they trust social media influencers and celebrities’ financial advice.
The pandemic has also significantly impacted Americans’ financial wellness and financial habits, with one in three saying their household finances have been negatively affected and 42% feeling as though they need to manage their finances more closely.
Millennials and Gen Z changing how they manage finances
The survey also found significant generational differences when it comes to managing finances with a majority of those under the age of 65 saying that they have changed how they manage their finances, compared to just half of those over 65.
Of any age group, Millennials (and especially men) are spending the most time managing their finances. Although half of Americans spend less than one hour a week on their finances, 39% of Millennials say they spend four or more hours a week managing theirs, compared to just 25% of Gen Z respondents and only seven percent of Baby Boomers. The pandemic continues to have an outsize effect on women, as the study found that men are nearly twice as likely as women to spend four hours or more a week on their personal finances (30% vs. 16%).
Back to basics?
Americans are utilizing more technology like video calls and contactless payments in their daily lives today but financial technology/video calls may not increase in popularity post-pandemic. Still, Americans are split on if this will impact their finances in a post-pandemic environment.
Americans are open to using new devices to manage their finances. Respondents say home voice assistants (42%), smartwatches (43%), or a chatbot on a financial provider’s website (44%) are tools they feel comfortable using to manage their finances. One-third of respondents say they already use digital tools from their financial provider to track financial information across accounts.
But many still prefer to use desktop computers (39%) to manage their finances, including their bank account balances and retirement plans, despite their openness and comfortability with utilizing new technologies.
Significantly, for those who work with a financial advisor, half prefer to continue interacting over the phone to utilizing video calls (25%). One in five respondents also say they don’t anticipate connecting with their financial provider as often via mobile app or over the phone following the end of the pandemic unless they need to address an account or investment concern.
This research presents an opportunity according to John Elton, Senior Vice President and Chief Information Officer for TIAA Bank.
“In today’s attention economy, many people are turning to tools and resources beyond their providers for information on how to manage their finances,” said Elton. “Financial services firms are in a unique position and need to offer high-tech and high-touch tools across platforms to meet all generations where they are – whether it’s online or in-person – to ensure we’re helping them recover financially from the pandemic.”
Lynn Brackpool Giles is a contributing editor to 401(k) Specialist. Giles is a former Managing Director of Communications and Consumer Services for the Financial Planning Association (FPA), where she oversaw all corporate, legislative, and consumer communications. In her current journalistic practice, she is a frequent contributor to numerous financial services industry publications.
