Americans’ levels of financial security are surprisingly smooth as tumultuous 2020 ends, something seen all year despite unprecedented market volatility.
A new COUNTRY Financial Security Index, fielded post-election, reveals Americans’ overall sentiment of financial security has remained constant in 2020. Fifty-five percent of Americans rated their financial security positively, compared to 53% who answered the same this time last year, prior to the pandemic.
However, it doesn’t mean Americans are ignoring their finances. Many reported taking a hard look at the implications of the year’s events on their personal finances to continue building financial security for the future.
As 2021 approaches, many Americans feel hopeful despite the turmoil of the past year. Thirty-eight percent of Americans say they are optimistic about their financial outlook in 2021, and a similar number expect their financial situation to stay the same (36%).
“There are many reasons Americans could be feeling good about their financial futures right now,” Troy Frerichs, Vice President of Investment Services at COUNTRY Financial, said in a statement. “Savings rates have gone up, we are hearing positive news about a COVID-19 vaccine and the stock market is at an all-time high. It is encouraging to see that even though many are suffering from pandemic fatigue and there is so much that is out of their control, Americans are taking steps to improve their financial security now and in the new year.”
Impact of COVID and election on feelings of financial wellness
Americans endured a pandemic, a volatile election and many natural disasters in 2020, but the pandemic has had the greatest impact on their feelings about their finances (40%), followed by the election results (30%). About one in five said neither of these events had an impact on their feelings of their financial situation.
Those who report feeling less financially secure overall are significantly more likely to say COVID-19 had a negative impact on their financial security compared to those who report feeling more secure overall (51% and 19%, respectively). Additionally, nearly one in four Millennials and Gen Z said the pandemic has negatively affected their finances compared to 24% of Baby Boomers.
When asked how the election has impacted their feelings of financial security, Americans’ responses are varied: 36% said the election results had no impact, 28% of Americans said that the results make them feel less confident about the future of their financial security, 18% said they feel more confident, and 18% don’t know. Three in 10 Boomers (32%) reported feeling less confident about their finances after the election, compared to 23% of Millennials/Gen Z and 28% of Gen X.