Although the COVID-19 pandemic presented a curveball for many families, most Americans (81%) feel in control of their financial situation, according to a recent study by financial-services firm Edward Jones. When it comes to financial resilience—the ability to withstand or quickly recover from difficult financial situations—almost half of respondents (46%) are confident in their current abilities.
“It’s encouraging to see that Americans feel confident in their financial standing given the tumultuous year 2020 presented,” Edward Jones Principal Vanessa Okwuraiwe said in a statement. “Even so, financial stability requires careful planning, goal-setting and the flexibility to revise that strategy if and when situations arise.”
Planning key to achieving financial stability, resilience
In fact, nearly 70% of Americans with a strategy feel financially stable (68%) and financially resilient (69%).
The COVID-19 pandemic and other challenges from 2020 led many individual investors to rework their financial strategies. Survey respondents shared that they are prioritizing and saving more for personal education opportunities, marriage and the birth of a child. Some have postponed major life events like buying a house (12%), changing careers (10%) and retirement (6%); while still saving for those future moments, many are repurposing funds to cover today’s unexpected expenses as a result of the pandemic.
More than half of respondents (53%) are actively contributing to their emergency funds, with roughly one-in-four (23%), stating it’s the first access point for immediate funds if faced with financial hardship. Cash (20%) and loans from family or friends (12%) round out the other top access points for immediate funds. That number increases for Zoomers, of which 31% of those born in the late 90s and early 2000s (members of Generation Z) indicated they would access funds through a loan from family or friends.
COVID-19 sparks interest in stocks, financial learning
Interestingly, about 1 in 10 Americans have either increased their investments in stocks and bonds (11%) or started investing for the first time (7%). Often overlooked, financial education can be a valuable tool in driving financial resilience and stability, which some generations are prioritizing more than others. One-third of Millennials (31%) indicated that increasing their financial knowledge is a priority, significantly higher than their older and younger counterparts, including Zoomers (22%), Gen X (22%) and Baby Boomers (14%).
Families, financial advisors trusted sources for guidance
As highlighted during market volatility of 2020, U.S. adults are looking for a guide who can understand them and help them achieve their financial goals.
In the past year, 26% of survey respondents began working with a financial advisor. However, only a small percentage of Americans (16%) consult with a financial advisor, and primarily lean on significant others (26%) or family and friends (21%) for help when making financial decisions.
“Given the number of financial worries brought about by the pandemic, whether it be job loss, retirement considerations, caregiving, or providing financial support to adult children, it is important to seek advice,” Okwuraiwe said. “These dynamics can be difficult to navigate. Investing in your financial education, consulting with a financial advisor, developing a financial strategy, and adjusting that strategy as situations arise are helpful strategies to increase financial resilience and stability.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
