Examining COVID-19's Impact on Consumers' Personal Finances Through Three-Part Survey Series

Thursday, October 22nd, 2020

LendingTree, the nation's leading online financial services marketplace, and Stash, the all-in-one personal finance app helping +5M Americans1 reach their financial goals, today unveiled a comprehensive look at the coronavirus pandemic's impact on consumers' personal finances through a three-part series, painting a full picture of Americans' financial health at the peak of the pandemic through a survey of nearly 5,000 consumers.

  • Part 1 focuses on how the pandemic and its ensuing economic repercussions impacted Americans' quality of life and brought various financial challenges.
  • Part 2 dives into the ways consumers changed the amount of money they spend in different areas, and which demographics were able to stash more money in savings.
  • Part 3 highlights behavior among investors specifically, including changes to risk level, portfolio diversification and amount invested.

Key findings from the reports:

  • Due to the economic impact of the COVID-19 crisis, 1 in 4 people expect to retire later than anticipated. That's especially true for those who make less than $35,000 (34%) and Gen Xers (29%), as well as Latino (30%) and Black consumers (28%).
  • People of color are facing heavy financial challenges amid the pandemic. In fact, 64% of Black consumers and 62% of Latinos cited facing at least one struggle due to the pandemic, compared with 49% of their white peers.
  • The top three things that consumers have increased spending on during the pandemic are face masks (76%), groceries and necessities (60%) and digital entertainment subscriptions (40%). The top three things that consumers have decreased spending on are dining out and/or nightlife (67%), travel (58%) and car rentals or purchases (25%).
  • More than 1 in 5 consumers (22%) began investing for the first time during the coronavirus pandemic. That includes those who aren't traditionally big investors — women (25%) and young adults (28% of Generation Zers).
  • Men were more likely to invest more money — and take more risks — during the pandemic than women. Women tended to maintain pre-pandemic levels.

"The coronavirus pandemic illuminated what we already know: most Americans' margin for financial error is tiny, and that's evident in the fact that nearly half of consumers were unprepared for the pandemic and its negative economic repercussions," said Matt Schulz, chief credit analyst at LendingTree. "The good news is many consumers learned from their lack of preparation and are more focused on building up their savings for the next emergency. Still, it's all the more clear that there is a massive wealth gap in this country, and some populations – especially people of color and low-income individuals – are having trouble paying this month's bills, let alone setting extra money aside."

"The last few months have been ripe with paradoxes. While some Americans seamlessly transitioned to remote work, millions of others faced unforeseen job loss. Similarly, certain groups invested their money for the very first time, while others struggled to afford everyday necessities," added Mindy Yu, director of investments at Stash. "As we continue to experience the economic fallout of the pandemic, it's clear that prioritizing and supporting Americans' financial health remains a top priority." 

For a full look at the three-part series, visit https://lp.stash.com/news/stash-and-lendingtree-team-up-to-uncover-covid-impact-on-americans-personal-finances/.