As the COVID-19 pandemic wears on, so does its impact on Americans’ health: physical, financial, emotional, and mental. Overall, 73% of Americans say that the COVID-19 pandemic and recession has moderately or highly impacted their current financial situation. Forty percent of respondents say they feel poor or very poor about their current financial security. In addition, there are significant social trends to evaluate, including mental health, anxiety, and stress challenges directly attributed to COVID-19.
Emotional, mental impacts
The ongoing pandemic is hitting American’s emotional and mental health as well as its physical health and finances. Forty-six percent of American adults say that the COVID-19 pandemic and economic situation have made them seek, or consider seeking, help for symptoms associated with anxiety or depression. With many people losing access to affordable healthcare when they lost their jobs, and others with limited access to quality medical care due to their healthcare plans, we could see additional challenges in the months ahead for people trying to rebuild their lives once COVID-19 is brought under control.
In addition our survey found:
46% say the pandemic and economic situation have caused them to feel overwhelmed about their financial situation.
35% say the pandemic and economic situation have put a significant strain on their personal relationships.
48% of women say the pandemic has had a negative impact on their mental health, versus 34% of men.
Signs of optimism among younger generations
For the first time in more than 100 years, the country has been subjected to a simultaneous pandemic and recession. Yet, some Americans do indicate positive feelings about the current economy, despite reporting they have experienced moderate or high levels of impact to their personal finances. Younger generations more often indicate higher levels of optimism when it comes to their feelings about the economy than do baby boomers.
Gen Zers (51%), millennials (50%) and Gen Xers (59%) report they feel good or very good about the current economic conditions in the country. Yet, these individuals feel COVID-19 has had a high impact on their current financial situation (32% of GenZers, 33% of millennials and 35% of Gen Zers).
On the other hand, 61% of baby boomers say they feel poor or very poor about economic conditions. However, only 17% of this group says that COVID-19 has had a high impact on their current financial situation; 45% say it has had low or no impact.
Despite their optimism, the younger generational groups frequently suggest they are facing challenges during the COVID-19 pandemic and the economic downturn.
20% of millennials, and 22% of Gen Zers, say they have experienced job loss in 2020 due to the changes brought about by the pandemic and economy.
33% of millennials who experienced a reduction in pay or work hours in 2020 say that resulted in an income reduction of 50% or more.
72% of millennials, and 80% of Gen Xers, who report currently using at least one of the COVID-19 pandemic relief measures, admit that they still feel they are far behind on their debt-payoff goals – even when taking into account the federal stimulus package relief programs they are currently using.
26% of Gen Xers say they are seriously considering sharing housing and associated costs with family or close friends.
Rising expenses, sinking income
Even though consumer debt has dropped since the beginning of the year, and personal savings rates are near all-time highs, Americans are spending more on certain critical expenses. For many, their debt burden, savings and financial flexibility has been constrained by lack of job opportunities, reduced work hours and lower household income.
For many people, credit card debt remains manageable, but 32% report total credit card debt of more than $10,000 – and 52% say they currently have less than $1,000 in their savings and checking accounts.
Food security continues to drive household expenses, with 44% expecting to spend, or are spending, more on groceries due to the COVID-19 pandemic. Thirty-four percent are, or anticipate, spending more on utilities due to the pandemic.
32% say they have experienced a reduction in pay/work hours, or took a lower-paying job, because of changes caused by the pandemic.
23% have lost jobs or experienced layoffs/furloughs
Of those who report experiencing a reduction in pay or work hours, over a quarter (27%) say their income has been reduced by 50% or more.
Impact of stimulus and other relief measures
Relief measures from the CARES Act, and other private hardship and forbearance programs, have helped to some degree, but the data from this survey suggests many people still face challenges now, and will continue to in the immediate future, when those programs expire.
Of those individuals who reported that they are currently making use of at least one COVID-19 pandemic relief measure, more than half say they will need the relief measures for three or more months. Without additional measures, 24% say that once their deferral period is over, they will not be able to make their loan payments on time.
When it comes to behavioral changes, 92% say they want to keep cash on hand due to uncertainty of the current environment, and remarkably, 31% say they are still using their pandemic relief check from the government distributed earlier this year.
Expected behavior changes in next months
With the pandemic not expected to be brought under control until mid-2021, we asked Americans how their behaviors will change. Not surprisingly, many will continue to reduce spending, will look for additional sources of income, and will not go on vacation.
46% said they will focus more on saving money for emergencies.
44% said they will look for additional sources of income.
43% said they will spend less money on holiday gifts this year.
40% said they will hold off on major vacations. Almost 6 in 10 adults (59%) say they are spending, or expect to spend, less – or nothing at all – on vacations this year, due to the pandemic.
Regardless of their degree of optimism, the fact that almost three-quarters of American adults say that the COVID-19 pandemic has moderately or highly impacted their current financial situation is telling. With almost half feeling that current economic conditions in the U.S. are poor or very poor – and that they feel overwhelmed about their financial situation – it is not surprising that the pandemic is wearing on the emotional and mental health as well as financial health of everyday Americans.
Mental health, anxiety, and stress issues directly attributed to COVID-19 will continue to grow as the pandemic and recession wears on.
The toll of the pandemic and associated economic situation extends to Americans’ thoughts and feelings on healthcare as well. Even though millions of Americans have lost their jobs and their health coverage, 73% of men and 51% of women still believe that their healthcare should be tied to their employment.
Methodology: Freedom Financial Network commissioned Atomik Research to conduct an online survey of 2,007 American adults, Oct. 23-28, 2020. The margin of error for the sample is +/- 2%, with a confidence interval of 95%. Atomik Research is an independent creative market research agency.
Download the raw data here.