Still burdened with the pandemic, Americans seem to have become wary about their finances.
Covid has heightened Americans’ awareness of the importance of protecting their financial assets and planning for uncertainty, according to The Financial Priorities study, new research from Ameriprise Financial which surveyed more than 3,000 Americans with at least $100,000 in investable assets.
Ameriprise found nearly two-thirds (63%) of respondents said protecting their financial assets is more important to them now than before the pandemic; about the same (62%) said planning for uncertainty is more important to them. Further, nearly half (45%) indicated that they believe these shifts will be long lasting.
Respondents were more focused on growing their savings (58%) and investments (46%). More than a quarter intended to increase the amount they invest for the long term in 2021.
Moreover, nearly half (45%) of those surveyed indicated that they reduced their spending during the pandemic and 30% of them expect to remain frugal with their money in the future. Conversely, a quarter made big ticket purchases or large expenses, including a home renovation.
Once the pandemic ends, a quarter of investors anticipated spending more money than usual on activities they had to postpone. Most respondents (63%) said their household income was not impacted by the pandemic, and 10% said their income increased while 25% reported that they are earning less money.
Retirement remains a priority. Among those who had determined when they would retire, more than two-thirds (69%) said the pandemic had not changed their goal. Nearly one-in-five respodnents, 18%, accelerated their plans to retire, and of these respondents, 83% said the decision was voluntary. Only 13% of those who had a retirement date in mind said the pandemic delayed this target.
Financial discussions are also more often becoming family affairs. Thirty percent of the respondents who are parents said they are discussing finances more with their children, and a quarter of investors have increased discussions with their spouse or partner about long-term financial issues. Even siblings are engaging in money talk, with nearly a quarter (23%) of respondents with siblings indicating that they are having more conversations—either about their own, their brothers or sisters, or their parents—about personal finances.
Nearly a third (63%) put an emergency savings fund in place and 44% developed a will or an estate plan. Additionally, nearly half (48%) adhered to a budget, and 30% of respondents who did not have an advisor prior to the pandemic started working with one or intend to do so soon, the survey said.
“While the economic impact of the pandemic has unevenly affected people across the country, it has been a wake-up call to everyone. The extraordinary circumstances of the last year convinced many people—even those who were already on strong financial footing—to take actions they may have previously put off,” Marcy Keckler, vice president of financial advice strategy at Ameriprise, said in a statement.