43% of Americans picked up a new financial habit during COVID-19, and most plan to continue in 2021

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In a Nutshell

Over two-fifths of Americans report having picked up new financial habits as a result of COVID-19 — and 94% of that group plan on sticking with those strategies to achieve their 2021 financial goals. Many feel optimistic about their chances.
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COVID-19 has altered some Americans’ financial habits, potentially forever.

A joint survey from Credit Karma and Qualtrics found that 43% of Americans have new financial habits as a result of the pandemic, and 94% of that group plans to keep up those strategies in 2021. Additionally, 37% of respondents say COVID-19 restrictions have helped them save money and 84% of these folks plan to continue spending less even after the pandemic ends.

The survey also found that even though half of respondents (50%) faced financial setbacks in 2020, many (53%) are feeling optimistic about being able to get back on track in 2021. (Learn about our methodology.)

Wherever you’ve found yourself at the end of 2020, Credit Karma has some advice on creating a sustainable budget for you and your family heading into the new year.

Key survey findings

43% of Americans picked up new financial habits as a result of COVID-19, and 94% of that group plan to continue that habit in 2021. The youngest cohort were most likely to have made a change — 57% of respondents aged 18 to 34 reported trying something new, compared to only 30% of those aged 55 or more.

50% of respondents experienced a financial setback in 2020, of whom 81% say it was because of COVID-19.

Over two-fifths (43%) of survey takers had to put off completing a financial milestone in 2020. But it seems people are still hopeful: 66% of all respondents believe they’ll be able to achieve a financial milestone in 2021. A full 53% say they feel optimistic about their chances in the upcoming year.

More than a third (37%) of those surveyed say that the pandemic helped them save money, and 84% of this group intend to maintain their current level of spending and saving post-pandemic.

Although Americans experienced financial setbacks in 2020, many believe they’ll hit their targets in 2021

According to our survey, many Americans (43%) weren’t able to achieve a financial milestone that they’d planned to accomplish in 2020. Goals included buying a car, going on vacation, starting an emergency fund, buying a home or having a medical procedure.

In addition, our survey found that half of Americans experienced a financial setback in 2020 and a whopping 81% attribute their misfortune to COVID-19. These financial setbacks manifested in several ways.

  • 40% had their income decrease
  • 30% took on more debt
  • 30% had to draw on emergency funds
  • 25% lost their jobs

Despite this, 53% of all respondents from our survey say they feel optimistic about their finances in 2021. And a full 66% of respondents believe they’ll be able to reach a financial milestone in the new year. In this group, the most popular financial goals for 2021 are …

  1. Starting an emergency fund (33%, tied)
  2. Going on vacation (33%, tied)
  3. Buying a car (26%) 

Many Americans changed how they approach their finances because of COVID-19, and they plan to keep it up next year

For better or worse, the turmoil of 2020 forced many Americans to pick up new financial habits that they plan to carry into next year. This may help to explain why people are feeling optimistic about their situations in 2021.

Below are the most popular new habits for all respondents overall and by age group.

New habit All respondents 18–34 35–54 55 or older
Following a budget 37% 53% 37% 26%
Reprioritizing necessities and spending less on daily expenses (for example, gym, transportation, takeout) 36% 47% 38% 27%
Focusing more effort on saving 33% 57% 28% 23%
Tracking my credit scores more closely 21% 28% 26% 13%
Learning more about financial markets and investing 16% 21% 19% 10%

Interestingly, 57% of 18- to 34-year-olds from our survey said they had adopted a new habit, while only 30% of the 55+ group said they were trying something new.

This could potentially be due to young people being hit harder in 2020, which may have forced them to navigate new, tighter financial situations. Our survey found that young respondents (ages 18 to 34 years) were more likely to have lost their job in 2020: 35% of this group reported job loss compared to only 20% of 35- to 54-year-olds and 19% of those 55+.

New spending habits and social norms could mean more savings for Americans in 2021

Nearly two-fifths of respondents from our survey (37%) say that the pandemic itself has helped them save money by reducing their spending on certain categories.

Social distancing has cut costs on dining and going out for 36% of this group. In addition, 31% say they no longer spend as much on daily expenses (like commuting, the gym and personal care), and 28% report less retail shopping. A full 30% eliminated vacations or planned travel.

Most of this group (84%) plan to continue spending less even after the pandemic ends. This combined with the new habits formed during virus-related restrictions could be a sign of how COVID-19 will affect Americans’ personal finance habits over the long haul.

Tips for tackling your finances in 2021 

Making a budget

Start with a budget! This can feel overwhelming, but it’s the most important step. You can’t get where you’re going if you don’t know where you’re starting. Here’s one way to create a budget.

  • Start by sitting down in front of your account statements and looking at a few months of your spending.
    • Make two lists: one for necessities, and one for discretionary purchases.
    • Add each item to its corresponding list, along with how much it costs per month.
    • Necessities include things like rent or mortgage payments, utilities, insurance, car maintenance, student loans, groceries and personal hygiene items. Discretionary expenses include activities like eating out, clothes shopping, and gym memberships.
  • Make a list of your once-a-year or semiannual expenses, like annually billed subscriptions, car registration fees or your pet’s annual physical. Just like with the monthly expenses, divide these into “necessary” and “discretionary” categories. Then divide the total expense by 12 to get the monthly cost.

Now that you have a pretty good idea of what you’re spending and on what, it’s time to do some math and prioritizing.

  • Add your income to your budget to see how much you’re spending compared to how much you’re bringing in.
  • Do you have anything left over at the end of the month? If so, good job! It might be time to start saving for an emergency or retirement.
  • If not, what expenses can you cut? If you can’t cut anything, is there a way to increase your income by asking for a raise or getting another job? Can you work with your lender to reduce your debt obligations?
  • If you have a lot of debt, you may want to make a specific plan for how you’ll tackle it.

Remember, if you have a partner, you’ll need to do this together. You’ll also likely need to re-do your budget at least once a year or if you have a major financial event, like a raise or job loss.

Choose the right tracking method for you

Where and how you make the budget is up to you, but we suggest using a spreadsheet to help keep things straight. If you use a program on a shared computer or a cloud-based spreadsheet like Google Sheets, then it’ll be even easier for your household to collaborate on the budget.

Plus, programs like these can even help you do the math. Some even already have built-in budgeting templates to help you get started.

A word on emergency funds

Many Americans don’t have emergency funds. For those that do, our study shows that many folks relied on their rainy-day savings during the pandemic.

Having savings could be the difference between continuing to manage or slipping into a cycle of high-interest debt. In May 2020, the Federal Reserve reported that only 63% of Americans would be able to cover a $400 emergency expense. For those who can’t pay right away, 15% would put the expense on a credit card to pay off over time and 2% would turn to a payday loan, deposit advance or overdraft.

That’s why it’s important to prioritize saving up some extra cash for unexpected expenses if you can balance it with paying down debt

Cut yourself some slack

Don’t forget to be kind to yourself while you do this. Financial planning can be an emotional and difficult process, but you should feel proud that you’re taking the steps to be in control. There are also little ways you can reward yourself as you pay off debt, which can help you prevent debt fatigue.

Get the kids involved

One final piece of advice: If you have children, it might be good to involve them in the budgeting. That way you can model responsible financial behaviors for them early. If your kids get an allowance, you can help them create a budget with that.

Have them set aside some money for savings, some for fun and some for charity — or whatever combination of categories you think is most important. Having a strong financial foundation can make things way easier for them as they grow up.


On behalf of Credit Karma, Qualtrics conducted a nationally representative online survey in November 2020 among 1,038 American adults to understand peoples’ spending and personal finance habits in 2020, along with their hopes for 2021.

About the author: Gaby Lapera is a researcher and writer at Credit Karma and a personal finance expert. She also spends time working on investing and science communication. Gaby graduated with a master's degree in biological anthropolo… Read more.