CHICAGO, Ill. — Money is not something anyone wants to worry about during the holidays. In a year still ravaged by the coronavirus pandemic and its economic fallout however, it appears many will be struggling through the most festive part of 2020. A survey finds over 60 percent of Americans say they’re now living paycheck-to-paycheck as the year draws to a close.
The poll of over 2,000 Americans, commissioned by Highland Solutions, wanted to see how spending habits and personal finances in the U.S. are holding up during the pandemic. Their results find 63 percent of respondents have cut back on their spending due to COVID. Six in 10 say they’re doing it to be more cautious, but 49 percent add it’s because of losing income at work.
Between making more frugal choices and statewide shutdowns across America, a majority of respondents say the normal “night out” is taking the biggest hit. Sixty-four percent are cutting down on dining out or ordering takeout. Another 61 percent add they’re seeing fewer movies, 55 percent are buying less clothing, and 52 percent are traveling less.
Just one in five Americans (21%) say they’re actually spending more during the pandemic. For those individuals, the biggest expenses are tied to increased food and grocery shopping.
Millions barely making ends meet
With government shutdowns forcing countless businesses to close and then lay off workers, one in four respondents now feel their income is not stable. Nearly two in three (63%) say they’re going paycheck-to-paycheck since March 2020. Millennials seem to be the hardest hit, with 64 percent saying they’re living off their paychecks.
“After the unemployment rate spiked to more than 14% in April, Americans continue to be wary about their job security and income,” writes Highland President Jon Berbaum in a media release.
With little help seeming to be on the way, more people are applying for credit and taking on debt. One in three respondents have opened a new credit card during COVID. A quarter of the poll add they’ve built up over $10,000 in debt while covering their expenses.
Living without savings
For Americans who’ve been saving for a rainy day, 2020 washed out most (if not all) of their funds. The polls finds 47 percent have run out of emergency savings during COVID. Two in three Americans add they regret not having enough in the bank before the crisis started.
A staggering 82 percent admit they can not afford a surprise $500 expense, if they suddenly have to face one. The poll also revealed that many people in the U.S. admit to living beyond their means. Overall, 44 percent say they could not support their lifestyle before pandemic. Members of Generation X and Millennials ranked as the top two groups to make this claim.
So when will things finally return to normal? Most agree it’s going to take some time, with 74 percent saying it’ll take their family between a few months and two years to recover from the financial shutdown. The most common estimate for financial recovery was between six and 12 months (22%).