Americans getting back to financial basics, open to guidance
One-third have become more likely to work with financial professionals, as opposed to 24 percent at the onset of the pandemic.
Americans are committed to taking charge of their own finances in the wake of the pandemic, and they are looking for advice about how to move forward in the coming year. A new survey conducted by the Harris Poll for Empower Retirement and Personal Capital reveals changing attitudes.
“Americans are returning to bedrock financial principles, including saving more, spending less and safeguarding their investments,” according to the survey report. “Fortunately, very few investors succumbed to panic. Americans’ risk tolerance and focus on long-term planning remain steady. And as they return to the fundamentals, Americans are looking for support from professionals who can provide advice and guidance in 2021 and beyond.”
The report offered four key takeaways:
Even Americans who didn’t lose income during the pandemic lost confidence in the future economy. American workers and retirees say they’re confident in their ability to manage their personal finances, despite deep pessimism about the larger economy. Yet when it comes to expectations for 2021, both employed and retired Americans are downshifting from optimism toward more realistic goals of stability and survival.
In April 2020, as the first pandemic wave was just taking hold, 29 percent of respondents were still “optimistic” about their own financial future. By December and the second pandemic wave, only 22 percent of respondents said they were optimistic about their own finances.
They are more committed to controlling what they can — their own finances. Unable to control the virus, the economy or the political environment, Americans are narrowing their focus to their immediate locus of control: the financial stability of their own households. Eighty-three percent of respondents said they want to minimize worrying about their finances this year, mainly through increased savings.
Women are more pessimistic than men about the broad economy and their own financial stability. Women have been disproportionately affected by the pandemic. Reasons include the fact that women are more likely to be the primary caregivers for children stuck at home, making it harder to work, and the heavy concentration of women in health care and other frontline service jobs that expose them to the coronavirus as well as to COVID-related business closures.
People are seeking guidance about how to maintain financial security and stability in an uncertain world. Fifty-two percent said that after all the uncertainty of 2020 they will seek more guidance when it comes to their financial strategies. One-third have become more likely to work with financial professionals, as opposed to 24 percent at the onset of the pandemic.
“It might go without saying that financial well-being impacts mental well-being, and indeed our survey found 78 percent of respondents in agreement,” the report concluded. “The shock and stress of the pandemic have prompted all manner of self-care regimens, and financial care is up near the top of the list.”
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