‘Survival mode’: Over 68% of Americans had financial setbacks in 2020 amid the pandemic

Coral Murphy

| USA TODAY
More than two-thirds of Americans experienced financial setbacks in 2020 due to job loss, declining household income or a drawdown of emergency savings, according to a new Fidelity study. The report by the financial services company also looked at how Americans plan to handle their finances as they head into 2021 and continue to face challenges brought on by the COVID-19 pandemic.Of the 3,011 surveyed adults, over 38% said they will spend the year in “survival mode,” meaning they’ll focus on the day-to-day rather than long-term goals to try to get themselves and their families through 2021.Although some respondents maintained their usual income over the past year, 68% had setbacks. Of those, 23% lost a job or household income; 20% had an unexpected non-health emergency; 18% had to provide unexpected financial aid to family or friends; and 16% had a health emergency in their family. For first-timers: Investing apps make it easy for beginners. Here’s how I started.There’s a stigma?: As COVID-19 persists, more Americans are unemployed beyond 6 monthsGen Z and millennial respondents were more determined to improve their finances despite the hurdles. Over 78% of all surveyed adults under the age of 39 are considering making a financial resolution for the year ahead,  compared to 59% of all Gen X-ers and Boomers.“Younger generations are building up their careers, families, and finances, so it makes sense they have important financial resolutions to make,” said Stacey Watson, senior vice president with oversight for Life Event Planning at Fidelity Investments. “Still, Gen-X-ers and Boomers also experienced significant financial challenges in 2020 and may want to consider making some resolutions of their own to build a stronger financial future particularly when it comes to retirement readiness,”Americans plan to cope with their financial setbacks by cutting expenses, relying on credit cards or personal loans, and dipping into emergency savings, even though the latter may have partly caused their problems. However, households are still worried about financial stresses next year. Forty-six percent are concerned about the pandemic’s impact on the economy; 35%, unexpected expenses; and 34%, the rising cost of food and other day-to-day essentials.. To build a better financial future, Fidelity recommends creating a budget plan, building emergency savings and finding new sources of income through part-time jobs or selling a product. Follow Coral Murphy on Twitter @CoralMerfi

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