The COVID-19 pandemic and its effects on the economy had Americans tightening their belts, and it may be the catalyst that now drives them to spend less and save more.
That’s according to a new survey from Empower Retirement and Personal Capital conducted by Harris Poll that asks working and retired Americans how the coronavirus economy has affected them, and their savings plans. The results show that Americans are worried about the overall economy, but they are committed to setting and reaching their financial goals.
Survey results and analysis are detailed in a research paper, “In Uncharted Waters, Savers Keep Both Hands on the Tiller.”
The pandemic highlighted the importance of saving, according to the survey. When asked about their financial goals, “saving for retirement” and “paying off personal debt” topped their lists. Survey respondents said they want to spend more time planning their finances and learn more about financial strategies.
The uncertainty of the economy, even as a coronavirus vaccine rolls out, has sparked more interest in expert financial advice. Survey results show 83% of respondents said they want to minimize worrying about their finances this year, mainly through increased savings.
Setting goals
- 52% of respondents said they will seek more guidance when it comes to their financial strategies.
- 33% said they are more likely to work with financial professionals as opposed to 24% at the onset of the pandemic.
- 41% of survey respondents said they plan to spend less money on non-essential items.
- 38% percent plan to save more of each paycheck they receive.
“This past year has been difficult for so many Americans. Those faced with financial hardships found themselves changing or adjusting their financial plans,” Stephen Jenks, Empower Retirement Chief Marketing Officer, said in a statement. “But this tough year also has inspired some workers and retirees to reexamine their financial goals and seek expert advice on the best strategies to help them achieve a secure retirement.”
The survey shows people are determined to save more and be prepared for the future, no matter what happens, and they are looking for advice on how to move forward financially in the new year.
“COVID-19 impacted every person in different and often exhaustive ways,” added Craig Birk, CFP, Chief Investment Officer at Personal Capital. “So many families suffered loss, hundreds of thousands of small businesses closed and millions of jobs vanished. For others, working remotely has had positive aspects. The good news is, for many, it’s not too late to turn things around. Working and retired Americans are saying they want to save early, often, and aggressively.