As the pandemic continues to dominate the daily lives of people all over the world, a huge toll has been taken on Americans’ spending habits and their ability to save.
There is no doubt that the impact of this pandemic has been crippling for not only the country’s economy but for the financial stability of countless Americans.
A new survey by GOBankingRates finds that 40% of Americans have less than $300 in savings. This is a drop compared to the pre-pandemic figure of $400 in savings used by the Federal Reserve as a gauge for measuring households’ financial well-being. Breaking down the GOBankingRates survey further, 50% of Americans have less than $600 in savings and 57.4% have less than $1000 in savings, compared with 69% of Americans with less than $1000 in savings in December 2019.
“We find that people’s savings can serve as a kind of litmus test for their financial wellbeing in general,” said Julia O’Brien, Associate Researcher at GOBankingRates. “The 50-30-20 budgeting rule suggests people save 20% of their income, so when people don’t have any savings, or have to withdraw from it unexpectedly, it’s a good indicator that they are struggling financially.”
The pandemic’s role in hindering the savings patterns of many Americans in 2021 is quite prominent. 63% of Americans say their personal finances were affected by COVID-19. The 25 to 34 age group was the most affected, at a staggering 75%, followed by the 35 to 44 age group with 67% and the 55 to 54 age group with 63.9%.
The survey also found a massive gender gap for the $0-$300 range in savings, with 45% female vs. 29% male respondents. “The gender gap in savings is likely an extension of the gender gap in income,” says O’Brien. “While 43.91% of women reported an annual income below $30,000, only 30.27% of men reported an income that low.”
There is no doubt that the impact of this pandemic has been crippling for not only the country’s economy but for the financial stability of countless Americans. For more information, GOBankingRates’ survey goes into greater detail on the makeup of the survey respondents and their specific economic situations.
Because of the pandemic, 55% of Americans had to dip into their savings, with the 25 to 34 age group being the most affected, at 64.3%.
12.6% of respondents said they had no savings to begin with, and the highest percentage went to the 55 to 64 age group with 18%.
The number of Americans living paycheck-to-paycheck also increased, with 37.5% compared with 33% in December 2019.