- Majority of Americans feel financially stable right now, despite COVID
- Many Americans were able to save during the pandemic, even more plan to save this summer
- Despite positive savings habits, many Americans look to make up for lost time and “treat themselves” this summer
Pandemic-related unemployment benefits will soon end in at least 25 states, impacting millions of Americans who may rely on the additional $300/week to make ends meet. This news comes as COVID restrictions continue to lift, the job market improves and more Americans reach full vaccination status.
The question is, are Americans financially prepared for these benefits to end this summer?
Data from a recent study conducted by Qualtrics on behalf of Credit Karma indicates the financial outlook for many Americans isn’t so bad and many are ready to spend — and save — this summer. Especially millennials.
According to the study, more than half of Americans feel financially stable right now, despite COVID. This stability could be the result of many consumers saving more and spending less throughout the pandemic.
Americans saved during the pandemic and plan to continue this summer
When it comes to savings, 42% of respondents said the pandemic enabled them to save more money. This was especially true among millennials, who were significantly more likely than Gen Z or GenX+ to say the pandemic enabled them to save money.
What’s more, most Americans hope to maintain this habit. According to the study, 76% of Americans plan to save money this summer. Among those who hope to save, 56% say they plan to save $1,000 or more, with 29% hoping to save north of $2,000. That’s a lot of money when you consider most Americans don’t have $400 saved in case of an emergency. Here’s a look at just how much Americans hope to save this summer.
|How much money do you hope to save?|
|More than $2,000||29%|
So, what are people saving for? Americans who aim to save this summer plan to put the cash towards building an emergency fund (32%) or hold it for a larger financial goal, like buying a car or home (22%). Others will use the money to pay down debt (19%) or invest (18%).
Most consumers plan to save while others will go into debt as the economy reopens
The majority of consumers (72%) reportedly spent the same or less over the course of the last year and many plan to maintain similar levels of spending in the months ahead. Despite positive trends in saving and spending among many Americans, others are still planning to spend big to make up for lost time.
According to the study, 56% of respondents plan to “treat themselves” when the economy opens up this summer. Among those who plan to treat themselves, most will do so because they feel like they’ve missed out on opportunities to travel (40%) during the pandemic or deserve to treat themselves (39%) after months of not being able to shop or dine out.
This could spell trouble for consumers’ finances. One in five Amerians expect to go into debt this summer and 67% of those who anticipate taking on debt will take on $501 or more in debt. Nearly 30% of Gen Z anticipate racking up even more debt, saying they’ll go more than $5,000 in debt this summer, compared to just 10% of millennials and 15% of Gen X+.
It’s all fun and games until offices reopen
Many Americans feel a sense of urgency to spend on summer experiences before they’re officially required to return to the office or workplace. Millennials are the most likely to feel this sense of urgency, with nearly 40% agreeing with the sentiment.
Among those who are employed and looking to spend on summer experiences ahead of an eventual return to the office, here’s what they’re looking to spend money on:
|What experiences do you plan to spend money on before returning to the office?|
|Travel to visit family and friends||42%|
|Take a vacation domestically||39%|
|Visit a museum or go to the theater||20%|
|Attend a concert or music festival||19%|
|Take a vacation abroad||13%|
|Relocate/move from my current living situation||9%|
|Live in another city/state||7%|
Despite a mostly rosy outlook, many Americans are still struggling to get their finances on track
While many Americans feel financially stable right now, the reality is, more than a quarter of Americans do not. Of those who do not feel financially stable right now, half say it’s because they don’t have money saved for emergencies. Others note not having money to pay their bills (31%) or being unable to find work (24%).
“Ultimately, what we’re seeing in the aftermath of the pandemic is a tale of two cities,” said Colleen McCreary, financial advocate at Credit Karma. “In many cases, the people who were able to maintain their jobs throughout the pandemic were able to save money and pay down debt, putting them in good financial standing as COVID restrictions lift. However, there’s a population of people feeling the trickle down effects of unemployment, balancing parenting with work or holding positions that are more junior. These are the people who are really feeling the pain, and these are the people whose finances are most vulnerable right now.”
On behalf of Credit Karma, Qualtrics conducted a nationally representative online survey in May 2021 among 1,033 American adults to understand how prepared Americans are for pandemic-era unemployment benefits to end. Specifically, the survey examines consumers’ spending and saving habits throughout the pandemic and how those habits are expected to change this summer.