Growing Number of Consumers Have Worsening Finances – WWD
Despite reports that many Americans have improved their financial situation in the past two years, entering the third year of the pandemic, new survey data shows Americans are plunging into savings more than ever. enough to cover basic needs.
In fact, new research conducted by Qualtrics on behalf of Credit Karma shows that more than half (53%) of respondents in the US have been in worse financial situations since the pandemic began, with 38% of people saying how much money they save. reduce.
These findings are especially true for Millennials and those with household incomes below $50,000. And while concern about worsening financial health is most evident among Millennials (64 percent), this view remains consistent across all groups including 48 percent of Generation Z, 54 percent of the population. hundred of Generation X and 45% of Boomers and above.
Notably, of the respondents who say they need to use their savings at some point in 2021, 60% say they do so to pay bills and 59% say they do. doing so to pay for other essential needs.
At the same time, 12% of respondents said they had no savings, and those with household incomes below $50,000 were most at risk, with up to 20% of respondents saying they had no savings. thrifty.
“We’re getting some mixed signals when it comes to consumer finances as we enter the third year of the pandemic,” said Colleen McCreary, consumer finance advocate at Credit Karma. Covid-19”. “However, if this research is any indication, the finances of many consumers have taken a hit over the past two years and especially their savings. This is a problem when you consider that nearly half of all Americans don’t have $400 saved up to cover an unexpected emergency.”
So how did the Americans get here? In part, Credit Karma’s research shows that as vaccines are rolled out to more people, there’s a sense of environmental normalcy that causes many consumers to spend more on dining out, travelling and shopping. shop. Combined with rising inflation, the amount of money that consumers spend has increased throughout the year.
According to the company’s survey, nearly 60% of respondents said they spent more money in 2021 than they did in 2020, and nearly half said they regret spending choices.
“As we head into a new year, amid economic uncertainty, rising inflation and perhaps the largest exodus from the job market in recent history, it’s important that we move into the new year,” McCreary said. is that consumers must consider their finances before taking action. “That’s especially true for people who want to leave their job or make a big purchase, such as buying a car or house. At the end of the day, cash is king.”
But will the new year bring new spending habits? According to respondents who said they spent more money in 2021, 44% said they would plan to spend less in 2022. The most likely to reduce spending was found to be Generation Z with 53 %, compared with 45% for Boomers, 42 percent for Gen X, and 41 percent for Millennials.
However, more than a quarter of respondents said they expected to spend more money in 2022, citing overspending on necessities such as rent, food and living expenses. other activities. Vacations, dining out, and family travel also rank among the top reasons why consumers splurge in 2022.
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https://wwd.com/business-news/business-features/credit-karma-survey-consumer-finances-1235031624/ Growing Number of Consumers Have Worsening Finances – WWD