Americans who qualified for the second round of stimulus checks are using the money for savings, to pay down debt or to handle everyday expenses...not for stimulating.
SAN MATEO, Calif. (PRWEB) February 11, 2021
The COVID-19 pandemic and recession continue to wear on Americans’ finances, habits and actions. The most recent Freedom Debt Relief (FDR) survey reveals shifts in consumer behavior with significant long-term potential impacts.
“From financial health to mental health, from social justice to a pandemic, with a subsequent economic recession, 2020 was a year like no other,” says Michael Micheletti, senior director of corporate communications at FDR. “As 2021 begins, we see that significant challenges remain, with the health of the nation and individual Americans at a crossroads.”
Consumer behavior changes impact spending, saving and stimulating
The recent round of $600 stimulus checks was intended to help fuel the economy through consumer spending and discretionary spending. But many Americans who qualified for the second round of stimulus checks are using – or plan to use – the money for savings, to pay down debt or to handle everyday expenses. Those who have received their stimulus checks say they have used the money on:
- Savings: 38%
- Debt payoff: 32%
- Everyday expenses (e.g., groceries, gas, coffee, etc.): 31%
- Discretionary spending: 27%
Of note, 41% of men say they have spent their stimulus money on themselves (discretionary spending), while only 13% of women say the same. In addition, 40% of women report spending the stimulus money on everyday expenses, while only 23% of men do.
The majority of Americans expect to modify their financial habits to this year, too.
- 12% say they will seriously consider sharing housing and associated costs with family or close friends.
- 28% say they will look for additional sources of income.
- 75% say they anticipate spending less, or about the same, on dining out.
- 75% say they plan on spending less, or about the same, on retail expenses.
Worrisome changes in healthcare behaviors carry long-term impacts
The survey identified unsettling findings about consumers’ healthcare behaviors, spending and debt. Forty percent of respondents say that they or someone in their household has experienced worsening health conditions as a result of avoiding healthcare settings and/or doctor’s offices. Moreover, 80% of these individuals report that this decision led them to ultimately incur more expensive medical bills or see a significant increase in the costs of their healthcare.
- 28% say they anticipate spending more on healthcare in 2021.
- 20% say they have medical debt.
- 75% of these individuals say they accumulated more medical debt since March 2020.
- 60% accumulated more medical debt because they, or someone in their household, experienced increased doctor’s visits due to potential COVID-19 exposures.
- 36% accumulated more medical debt because they, or someone in their household, contracted COVID-19.
- 26% accumulated more medical debt because they, or the head of their household, lost health insurance coverage and incurred additional out-of-pocket expenses as a result.
“Clearly, the pandemic has disrupted normal behaviors when it comes to preventive and diagnostic care,” says Micheletti. “Closed offices, and cancelled or postponed appointments are understandable, but pushing off preventive or needed care can have serious long-lasting impacts on Americans’ health and wallets.”
Amid optimism, people need money…NOW.
Three-quarters of consumers (76%) say they feel good or very good about their current financial security – up 24 percentage points from a survey FDR conducted last October. In addition, 70% say they are confident in their personal financial outlook. At the same time, consumers are struggling with cash flow and debt.
- 73% somewhat or strongly agree that an unexpected $500 expense or bill would be problematic.
- 56% say they worry about being able to keep up with all of their bills and payments.
- 56% feel overwhelmed with their debt and financial situation.
Of startling concern is the impact of the tax refund delay. With the opening of tax season delayed by approximately three weeks, consumers can expect a similar delay in receiving refunds. More than one in five (21%) report that it would be difficult to buy needed groceries and household goods if they receive their refund just two or three weeks later than usual.
The same number said that a similar delay would lead them to accumulate more credit card debt. As credit card debt is already an issue for 43% of respondents – and half of them have more debt than they had a year ago – the impact of a delay in refund receipt could mean major difficulties for Americans throughout the next year, says Micheletti.
Stark gender differences
Survey results showed some significant differences in findings between genders.
- Impact of COVID-19 on finances: More men (76%) than women (62%) say that COVID-19 has impacted their current financial situation moderately or highly.
- Financial security: 86% of men say they feel good or very good about their current financial security, while just 66% of women do. Furthermore, 34% of women feel poor or very poor about their financial security.
- Debt: Despite the above finding, 64% of men say they feel overwhelmed with their debt and financial situation. Only 48% of women do.
- Financially better or worse off: 40% of women say they feel financially worse off than they did a year ago.
- Stimulus money spending: 41% of men who have received their money say they have spent it on themselves (discretionary spending), while only 13% of women have.
Commissioned by Freedom Debt Relief, the online poll of 2,005 adults in the United States was conducted by Atomik Research Jan. 20-22. The margin of error is +/- 2%, with a confidence interval of 95%. Atomik Research is an independent creative market research agency.
Freedom Debt Relief
Co-founded by Andrew Housser and Brad Stroh, Freedom Debt Relief is part of Freedom Financial Network, LLC, providing innovative solutions that empower people to live healthier financial lives. For people struggling with debt, the custom Freedom Debt Relief program offers the chance to significantly reduce and resolve what they owe more quickly than they could on their own. For more information about the company and its services, see http://www.freedomdebtrelief.com/faq.
Headquartered in San Mateo, California, Freedom Debt Relief also operates an office in Tempe, Arizona, and employs more than 2,200. The company has been voted one of the best places to work in both the San Francisco Bay area and the Phoenix area for several years.
Contact: Michael Micheletti, email@example.com, 415-359-6985