SoFi Survey: Financial Volatility Still Reverberates Due to COVID-19
We may be tired of the novel coronavirus—but it’s not tired of us. And it’s still having a major impact on our money.
For the past few months, SoFi has been keeping tabs on how Americans are responding to the COVID-19 crisis both financially and emotionally through a series of surveys.
In April, we discovered that the virus itself was preoccupying the nation’s psyche, with 65% of respondents saying it was causing them the most stress. Come May, the focus moved to finances, with 68% of respondents saying they’d made changes in how they were handling their money (up from 51% the month before).
So what are things looking like now that the year’s half gone (!!)?
SoFi surveyed over 1,000 consumers between the ages of 18 and 74 through SurveyMonkey® to find out.
Financial Strategies are Still Shifting
This time around, 61% of respondents reported making changes in how they handled their finances over the past month—which is a slight decrease since our last finding of 68%.
Still, those results suggest that about a third of Americans are taking a good, hard look at the numbers, and even more are hoping to craft a more solid financial plan as we come out of the crisis: 78% of respondents agreed that they would like to build and stick to a budget.
In some cases, this seems to represent a new financial focus that could benefit respondents in the long run: 37% admitted they did not have a budget in place before the COVID-19 crisis hit.
However, the circumstances that catalyzed this new frugality leave something to be desired. In short, many are making less money: 43% of respondents admit to experiencing a salary decrease due to COVID-19.
There is one good thing about quarantine: it makes a certain amount of saving easy.
In the survey, 65% of respondents said they’re no longer spending money on eating out, entertainment, and other discretionary expenses. A full 37% said they aren’t spending money at restaurants, while 25% have cut back on travel and 17% have cut movies and other fun to-dos.
And whether they’re working at home or just not working, 26% said they no longer have to commute—or foot the bill to do so.
Despite these savings, and even though some cities and states are in the process of “opening back up,” 49% of respondents are still experiencing emotional stress surrounding the virus. Money-related stress is taking a back seat at 23%, which is a decrease of 7% since last time.
Although money worries are a factor, the most prominent cause of stress is the uncertainty of not knowing when life will go back to “normal,” which 41% of respondents admitted feeling. Fortunately, this is a sharp decline since our last survey, when 68% reported this worry.
Other causes of COVID-related heartache are also on the decline. Lack of human interaction is troubling just 20% of respondents, compared to last month’s finding of 54%; the inability to go outside for long periods of time concerns 23% compared to last month’s 49%.
But despite these developments, more respondents reported experiencing stress in general this month: 49% represents an increase of 6% since our last survey.
Solving the Savings Puzzle
Creating a solid plan for stable future finances is one way to allay pandemic-related worries and stress.
Respondents have good ideas about what to do with the extra money they’re stashing thanks to the cuts they’re making: 46% shared that they would put that extra money into savings, followed by paying off existing loans or debt (16%), adding to an emergency fund (16%), and investing (15%).
However, respondents also reported needing advice when it comes to understanding certain aspects of finance:
• 38% said they need help with investing or stocks
• 28% need help with building an emergency fund
• 26% need help with credit card debt
• 25% need help funding their retirement
This is backed up by previous survey results, which showed that 37% of respondents said they needed help understanding the current market trends before making major changes to their financial strategy.
What’s more, many Gen Z respondents—55%—are turning to their families, rather than financial experts, for advice.
Planning for the Future—Whatever it May Be
Although tagging friends and family for guidance may be good practice in general, when it comes to money, the very best advisor… is an actual, professional advisor.
And at a time when so many Americans feel their lives lack stability both financially and otherwise, having some guidance while making money-related decisions can be a game-changer.
As the pandemic—and the steps we take to thwart it—continue to evolve and change, so too do financial needs. Building a budget, figuring out a solid investment strategy, and paying off debt are all even tougher when everything is in flux.
SoFi members have access to complimentary financial planning services, which allow them to speak to qualified, professional financial advisors at no cost.
Our team of financial planners is ready and able to answer whatever questions you may have about how best to plan for the future, even when nobody’s sure exactly what it’s going to look like yet.
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC .