The pandemic has no doubt taken a financial toll on Americans, with more than half reporting that they or a close family member have been impacted. It also has forced many to prioritize saving for a rainy day and to plan for their financial future, according to Charles Schwab’s 2020 Modern Wealth Survey.
At the same time, Americans also have considerably lowered the bar for what it takes to be financially comfortable and how much it takes to be wealthy.
In January, they indicated an average of $934,000 met their standard for comfort. That amount dropped nearly 30% in June to $655,000. And in June, respondent said an average of $2.0 million in net worth equates to wealth, down 23% from a loftier average of $2.6 million in January.
The annual survey gathered data from 1,000 respondents in January, before the Covid-19 outbreak in the U.S., and again in June. It revealed that more than a third (36%) of Americans said they are more likely to have savings to cover emergency expenses, and 40% are more likely to be saving more in general compared to before the pandemic outbreak. Also, 24% indicated that they are now more likely to have a financial plan.
While around 30% of respondents expressed some apprehension about investing, roughly one in five said they are more likely to invest more in the stock market (19%) or start investing (22%) during this time.
In terms of impact, 30% of respondents said they or a family member have experienced a salary cut or reduced work hours, and 25% said either they or a family member have been furloughed or laid off. Millennials, the survey said, are most affected when it comes to impacts on salary and work hours, with 41% indicating that they or a family member have experienced one of these issues.
The survey also found that the pandemic has heightened the stress level of Americans, with respondents's average financial stress level at 49.5 (on a scale of zero to 100) in 2019, compared to 52.5 today. They also worry that their increasing stress levels might have a lasting effect (49.2%). Millennials, the survey said, are the most financially stressed, while baby boomers are the least financially stressed.
Additionally, the survey noted that while Americans’ attitudes about money play a role in their overall happiness, relationships emerged as the top choice (39%) when asked about the most important factor to their overall happiness today, followed by health (27%) and money (17%). Those choices remained the same order as before the pandemic outbreak. Rounding out the five respones were lifestyle (14%) and career (3%).