While the coronavirus pandemic has sparked widespread financial troubles, it’s also prompting consumers to make changes that may serve them for years to come.
San Francisco-based financial services company Charles Schwab conducted its annual survey that looks at the beliefs that consumers have about their saving, spending and investment habits, as well as their wealth. This year’s edition, conducted in January and then again in June and July, suggests that people have been reassessing their financial views and practices in the wake of the coronavirus pandemic.
The cost of financial comfort
The coronavirus crisis may be changing Americans’ viewpoints on what it means to be wealthy, as consumers believe it takes less money to live comfortably today than before the pandemic.
In January, survey respondents cited an average of $934,000 when asked what net worth it would take for them to be financially comfortable. In late June and early July, the average response was $655,000 — a decline of nearly 30%.
Respondents in June and July said they would consider someone with a $2 million net worth to be wealthy. However, in January, respondents said it would take a $2.6 million net worth for someone to be considered wealthy, a 23% difference.
Consumers more proactive about saving
Consumers appear to also be more concerned with improving their financial health today than they were before the pandemic began:
- 36% said they’re more likely now to have enough savings for emergency expenses
- 40% said they’re more likely now to be saving more in general
- 24% said they’re more likely now to have a financial plan
Nearly a third of respondents (30%) expressed wariness about investing at this time. However, 22% of respondents said they’re more likely to start investing during the pandemic, while 19% of respondents said they’re more likely now to invest more in the stock market.
Financial concerns still abound
When it comes to the biggest drivers of happiness, the largest percentage of respondents (39%) said relationships were the biggest factor. That was followed by:
- Health: 27%
- Money: 17%
- Lifestyle: 14%
- Career: 3%
Yet, financial concerns have been high throughout the pandemic, and many respondents to the Charles Schwab survey worried about how the pandemic may be affecting their financial future.
More than half (57%) said either they or a close family member have been impacted financially by the pandemic. In addition, only a quarter in June and July said they felt highly confident about reaching their financial goals, down from one-third of respondents who felt highly confident in January.
Methodology: San Francisco-based market research firm Logica Research conducted two surveys for Charles Schwab. The first took place between Jan. 9 and 16, 2020, while the second occurred between June 25 and July 2, 2020. Both surveyed 1,000 U.S. consumers ages 21 to 75.