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Survey: How the Pandemic Impacts Family Finances

Key Takeaways

  • 62% of parents said they have more out-of-pocket costs while their kids are learning at home
  • Nearly half of respondents reported that they’d have to seek new or additional income sources if there was another lockdown
  • 44% of survey respondents said they would have to cut back on their savings in the case of another lockdown

It’s been one year since COVID-19 was declared a pandemic.

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Some Americans have been socially distancing since the beginning, while other areas reopened throughout the year, allowing people to return to some semblance of normalcy.

Although the vaccine rollout gives us light at the end of the tunnel, lockdowns continue in many places with worrying financial effects.

Personal Capital and Empower Retirement sponsored a recent poll conducted by The Harris Poll to find out how people are responding to current events. In this article, we’re sharing some of the top concerns Americans have during the pandemic.

Education Expenses

Education is a top worry for many American families. Roughly half of the parents in our survey reported that their children were still in fully remote learning, and another 35% reported a mix of remote and in-person learning. Unfortunately, these precautions are coming at a cost to parents.

62% of parents in our survey said they have more out-of-pocket costs while their kids are learning at home. These expenses include equipment necessary for at-home learning, including computers or iPads, desks, and art supplies. Some families are also paying for their school-aged children to do their remote learning at a daycare since the parents are working during the day.

It’s not just the financials of it that parents are worried about, either. 70% of parents are concerned about their child’s development, and 61% don’t know how they’ll cope if kids don’t go back to school.

Read More: How to Take Control of the Household Budget

Unemployment and Market Crashes

One of the most significant impacts of the lockdowns has been the rising unemployment numbers. When the first lockdowns went into effect in early 2020, there were 36 million unemployment claims in just the first few months. Certain industries were hit harder than others, with food service, hospitality, and entertainment jobs being severely cut and almost entirely eliminated in some places.

Nearly half of respondents in our survey reported that they’d have to seek new or additional income sources if there was another lockdown. Gen Z respondents were most likely to say this, while Boomers were least likely. Hispanic and Black respondents were much more likely than Asian or white individuals to report that they would need to find new income.

It’s not just a loss of job income that people are afraid of. 44% also reported they worry about losing money in their investments if the market drops again. While market trends were largely positive throughout 2020, there was an initial crash when the lockdowns began. The Dow lost 37% of its value by late March before it began to pick up again in April.

Decreased Savings and Increased Debt

Another concern that many Americans have is whether they’ll be able to put money toward their debt and savings.

First, about 44% of survey respondents said that in another lockdown, they would have to cut back on their savings. Unfortunately, it’s not just new savings that’s affected. The New York Times reported that since the start of the pandemic, more than 2.1 million Americans have pulled money from their existing retirement savings.

Americans are also concerned about going into more debt in the event of another lockdown. 41% of survey respondents reported being worried they’d have to accumulate more debt. In particular, Millennials felt they’d go into more debt — 55% compared to 44% of Gen Z, 46% of Gen X, and 31% of Boomers.

These fears aren’t unfounded. A recent survey found that about half of people accrued more debt during the pandemic, and roughly half of those individuals say it was a direct result of the pandemic.

The Bottom Line

Between increased education costs and loss of income, people are worried about what comes next.

So what can people do? Our survey found that Americans are largely going back to the basics. They’re working on reducing their spending and increasing their savings to stay prepared for the long term.

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Personal Capital compensates Erin Gobler for providing the content contained in this blog post. The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money. Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

Erin Gobler is a money coach who helps people pay off debt and reach their big financial goals without giving up spending on the things they love.
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