With nearly a year in various levels of quarantine and lockdown, people are spending more time in their home than ever before. The effects of the COVID-19 pandemic have been measured in far more than social distancing guidelines though. In September 2020, more than 26 million Americans were unemployed as a result of the pandemic, and those without work have made excessive efforts to cut their spending and reduce their expenses in order to survive.
And while many Americans were already unprepared for a financial emergency in their life, those with emergency savings may have quite a bit less as a result of the pandemic. To help explore the financial impact of COVID-19, Cinch Home Services surveyed over 1,000 people to understand how their emergency savings have changed over the last year and how prepared they are to pay for home repairs during the pandemic.
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Saving Status Across the U.S.
Among those surveyed, 14% said they had no money put aside in emergency savings. Among the 86% with money saved for an emergency, the average person had roughly six months of rent or mortgage payments in their rainy day fund.
Still, the COVID-19 pandemic has put a damper on some savings accounts. More than a third of Americans polled said the amount of money they had in emergency savings has decreased in the last year, including 40% of men and 33% of women. Only 1 in 3 people said they could afford home repairs at the time of the survey.
Delaying Home Repairs
There’s never a good time for an emergency home repair, but now might be particularly inconvenient for some. More than a quarter of Americans (27%) reported they couldn’t afford an emergency home repair today. If a home repair were to cost them $1,000, 25% of millennials, 23% of Generation X respondents, and 15% of baby boomers would be unable to afford the expense.
Among those who recently experienced an unexpected home repair, those with savings said the cost amounted to 44% of the money they had put aside.
The costs associated with home repairs can be extensive, and many Americans live in fear that an unexpected emergency could cost them dearly. Twenty-nine percent of people said they were at least moderately worried about having to pay for emergency home repairs, followed by 19% who were very worried and 12% who were extremely concerned about such an expense.
Factors more likely to increase concern over unexpected repairs included the age of the home (48%), a lack of savings (25%), preexisting problems with the house (13%), and natural disasters (7%). Homeowners should always be prepared for new home maintenance or repair projects to arise, however, and 78% of people said they were planning to save for repairs in the future. Older Americans, including baby boomers and Gen Xers were more likely than millennials to put aside money to prepare for future home repairs.
In the event of a serious home repair, 61% of Americans said they would need to go into debt in order to afford the cost, including 65% of baby boomers and 64% of Gen X Americans. Perhaps as a result of this, some people were currently delaying certain repairs they knew were needed, including water damage (24%), repairing their water heater (22%), termite damage (13%), and pipe fixes (9%).
Just 42% of people said some home repairs were worth going into debt over, though 71% of people were interested in making improvements to their home.
The Pandemic’s Impact on Home Repairs
Unexpected home repairs are already scary enough, but the economic impact of the COVID-19 pandemic has made it even more difficult for some people to adequately prepare for maintenance or repairs to their home.
Many people reported a decrease in their emergency savings because of the pandemic, and some even admitted to putting off repairs they knew they needed or going into debt to cover the bill. Despite the challenging times, 4 out of 5 people had plans to save money for home repairs in 2021, hopefully allowing them to catch up to the maintenance plans they’d been delaying.