At the peak of the devastating impact of COVID-19 on the U.S. economy, more than 40 million Americans found themselves unemployed as a result of the pandemic. To help put that figure into perspective, at one point, less than half of the people living in Los Angeles still had jobs.
While many parts of the country work toward reopening and understanding how to safely return to some sense of normalcy, for millions of people across the country, there is no simple switch that can help reset their finances or employment status. By some estimations, it could take years for all of the jobs lost due to COVID-19 to completely return, not to mention the recovery of those who’ve fallen behind on rent, mortgages, car payments, or other bills along the way.
ValueWalk's Raul Panganiban interviews Joseph Cioffi, Author of Credit Chronometer and Partner at Davis + Gilbert where he is Chair of the Insolvency, Creditor’s Rights & Financial Products Practice Group. In the interview, we discuss the findings of the 3rd Annual report. Q2 2021 hedge fund letters, conferences and more The following is a computer Read More
For so many Americans, financially surviving this global pandemic means something different. From those who’ve needed financial assistance to get by or relied on support from friends and family members to those who are dipping into their savings or retirement funds to help others, Medical Alert Buyers Guide surveyed more than 1,000 people to understand how Americans are making due.
Needing Financial Assistance Due to COVID-19
Immediate findings from the survey revealed more than half of Americans (54%) needed some level of financial assistance during the COVID-19 pandemic, and another 40% acknowledged needing assistance from their friends or family members to get by.
The financial strain of the pandemic isn’t exclusive to those in need of financial support, either. More than 1 in 3 Americans have had to provide monetary assistance to either their friends or family members, despite the strain it could put on their relationships.
Many struggle to predict when these financial hardships will come to and end, with 77% of Americans currently supporting their friends or family financially believing that assistance will need to continue through the summer of 2020. More than 2 in 3 Americans providing assistance have dipped into their own savings to do so, and 13% of Americans have pulled funds out of their retirement savings to help support loved ones through this difficult time.
Generation X Americans (81%) were the most likely to carry the burden of having to help care for their loved ones financially, though baby boomers (79%) and millennials (76%) were not immune to those needs. Most commonly, assistance was needed by friends (29%), elderly parents (27%), and extended family members of friends (24%). More than half of baby boomers reported supporting their adult children through pandemic-related struggles.
Needing a Helping Hand
Given the overwhelming impact of the pandemic on the national economy, a majority of people relied on support from others to make ends meet at some point in 2020. More than 2 in 3 Americans reported accepting financial assistance from relatives or friends due to COVID-19, and 40% admitted they felt shame for requiring that financial aid.
For many of those in need, assistance came in the form of basic necessities. Sixty percent of people helped friends or family members purchase groceries ($358, on average), followed by paying rent ($682) and paying their utilities. Generation X Americans gave the most financial assistance during the pandemic, averaging $1,611. Both baby boomers and millennials gave roughly $1,400 to others in assistance, on average.
For those struggling to get by and feeling guilty or embarrassed for needing support from friends or family, there might be few alternatives for getting the aid required to survive. More than half of Americans acknowledged considering additional employment as a means for preparing for a potential second wave of COVID-19 in the U.S.
Compared to just 4% of Americans who felt COVID-19 left a positive impact on their finances, a vast majority considered the pandemic negative (39%) or somewhat negative (34%) on their monetary situation. Both millennials and Gen X Americans were the most likely generations to experience a negative impact to their finances due to the pandemic.
As a result of the negative impact on their income or expenses, nearly half of Americans (49%) had to delay or completely skip paying their bills (including rent, credit cards, or car payments) in order to survive. Nearly 2 in 3 people furloughed during the pandemic had delayed or skipped paying their bills or other payments.
Learning How to Get by During the Pandemic
It’s commonly said that it’s easier to give than to receive. Even though a majority of Americans needed financial support to weather the storm caused by COVID-19, many also felt ashamed for needing help from their friends or family members to pay bills, buy groceries, or make their monthly rent obligations.
As the country looks forward to reopening and getting back to feelings of normalcy, many people who have needed support during the pandemic expect to continue needing it through the summer (at least). For both those in need and the loved ones they’re leaning on, the financial impact of the pandemic could continue for years to come.