Personal finance needs are on the rise during COVID-19
The way Americans manage their money continues to change as the ongoing pandemic impacts the American wallet in different ways. Our Logica Future of Money Study uncovered the top three takeaways about the financial impact of the global health crisis on money management:
- The financial impact of COVID-19 differs among Americans
- Americans want help with their personal finances
- Americans have widely varied needs for personal finance help
1. The financial impact of COVID-19 differs among Americans
Overall, Americans are split in their ability to manage financially, with over half (54%) being able to manage their monthly expenses, while close to half are just able to cover expenses with nothing left over (29%) or don’t have enough (17%). At the same time, two-thirds of Americans report being somewhat or very stressed about their financial situation during the pandemic.
Financial coping mechanisms and stress vary for different groups in America. For example, more women (70%) are reporting more financial stress than men (62%). But it is not just by gender that differs, COVID-19’s financial impact also differs by race. Compared to whites, diverse racial and ethnic groups report far higher levels of stress, that they are working fewer hours, or that they are not working at all.
2. Americans want help with their personal finances
With the expectation that the coronavirus will continue to impact their work in the next 12 months (50% vs. 29% impacting spending, 15% saving, 6% investing), Americans also are looking for help with their personal finances.
The top three sources of trusted advice for personal finance are financial advisors, financial institutions and friends/colleagues. Overall trust of employers as a source of financial advice is relatively low (3%), but the interest in more advice and help from employers in a number of areas is on the rise. We see an increase in need for the usual benefits like retirement plans and insurance, along with employees wanting more help with an emergency savings account/plan (32% want this more).
“My employer said if you came down with COVID you don’t have to claim that on your sick leave. There’s a special fund for that." —(Qualitative Research Respondent, corresponding qualitative research with KNow Research)
3. Americans have widely varied needs for personal finance help
Our Logica Future of Money Study shows that different groups need different help navigating our current times.
Based on differences in income, we can see a range in the kind of help needed. Those with a household income of less than $75K need help budgeting, managing spending and understanding how to use credit. Those with a household income greater than $75K are looking to get the most out of their savings, plan for the future, build wealth and manage risk.
Based on the findings from our latest Future of Money Study, we recommend taking a look at your research agenda.
- Look at your market. Is there a new market opportunity to meet the changing needs in people’s money mindset
- Look at how you are providing help and advice to your market. Do you have the tools and programs people need
- Evaluate how you are targeting campaigns. Are you communicating the most relevant program to the right people in the right way?