In the report, the majority of US participants polled cited finances as a major source of concern for them as they progress through the new year.
More specifically, the respondents were worried about securing a job. Even in consideration of the purported hiring boom, it’s not entirely clear which industries will support the most job gains in the coming months.
Moreover, many of the Americans featured in the survey are still playing catchup after an extended period of revenue loss beginning around this time last year. Nearly 30 million Americans intend on applying for credit cards in order to compensate for limited income.
“The COVID-19 pandemic had a staggering impact on the U.S. in 2020, both in terms of public health and the economy. Though the country is making steady progress with vaccination, reopening, and job gains, it will still be months before we can restore normalcy,” the Wallethub researchers wrote.
“In fact, 145 million Americans say they cannot afford another year like 2020, according to a nationally representative survey conducted by WalletHub. The survey gauged how coronavirus has affected Americans’ lives and spending habits.”
Unfortunately, insiders report that roughly 71 million people will likely be unable to pay off credit card bills acquired to supplement lost income.
It’s no surprise then, that just about four in five respondents involved in the Wallethub report (79%) said that credit card companies should forgive late payments due to financial struggles caused by COVID-19.
“The COVID-19 pandemic is now the second biggest stressor in America, with money problems taking first place,” WalletHub analyst Jill Gonzalez explained on the back of the new study.
“The U.S. is rolling out the COVID-19 vaccine and people have gotten used to social distancing measures, which explains why people are worrying a bit less about the pandemic itself. The long-lasting financial consequences caused by COVID-19 are now taking a more prominent position in people’s minds.”
One of the positive impacts of the economic crisis of last year concerns a switch in fiscal priorities among consumers.
On balance, Americans are spending 25% more on groceries than they do on luxury products these days.
For whatever reason, women were found to spend significantly less money on travel expenses than they did last year, while men are more likely to cut out expenses related to entertainment events.
As hospitality industries begin to remerge, employers will expand their hiring pools and Americans will spend more money on luxury experiences.
“The main reason that we expect a hiring boom this year is that reopening, fiscal stimulus, and pent-up savings should fuel very strong demand growth,” said Goldman Sach’s chief economist Jan Hatzius in a recent paper.
“Another key reason we expect a quick labor market recovery is that two-thirds of remaining pandemic job losses are in highly virus-sensitive sectors, where employment should rebound as the economy fully reopens. The sharp increase in the virus-depressed leisure and hospitality category in the February employment report provided an early hint of things to come.”
Still, we’re not completely out of the woods yet. More than 100 million Americans expect to cancel travel plans due to coronavirus fears. If trends continue to indicate that Americans are becoming more financially literate, further stimulus relief will pave the way for a stronger economic market in the early months of 2022.
“One positive way that consumers have reacted to the pandemic is by increasing the amount of money they save. Roughly 61% of adults say they are saving more, as opposed to buying more, due to COVID-19,” Gonzalez concluded.
“The stimulus checks provided directly to Americans have been a big help during the COVID-19 pandemic. In fact, they led to record paydowns of credit-card debt in 2020, in addition to helping people keep up with other essential bills. The additional $1,400 checks provided through the American Rescue Plan should have a similarly positive impact.”
Other major areas of anxiety mentioned alongside finances in the new Wallethub survey were COVID-19 (28%) relationships (12%), and climate change (9%).