Thanks to the COVID-Related Benefits, Americans Were Able to Save Money and Pay Off Debts But Some Are Taking Advantage of This Temporary Solution

By Jessa Martin On Jan 19, 2022

During the pandemic, many Americans noticed an improvement in their financial status. Thousands of Americans were able to save money and pay off credit card debt as a consequence of stimulus checks, increased unemployment compensation, student loan and mortgage deferment, and the closing of businesses during the lockdown period.

However, there are some early indications that the tides are beginning to shift.

Overall, 27 percent of adults in the United States concluded the year in a worse financial position, compared to 25 percent who started the year in a better financial position.

In addition, a survey of 2,200 adults in the United States published Tuesday by the Morning Consult indicated that 37 percent of adults found it more difficult to manage their financial affairs.

Women and adults with annual incomes below $50,000 said that they were in a worse financial position by the end of 2021 than they were at the beginning.

Women reported that they were in a worse financial position at the end of the year, while males said that they were in a better financial position at the end of the year. Men were more likely than women to say they were better off at the end of the year, while women were more likely to say they were worse off.

The majority of people with yearly incomes below $50,000 said that they were worse off at the end of the year, compared to only 19 percent who reported that they were better off.

Meanwhile, 42 percent of those who earned at least $100,000 in the previous year claimed they were better off as a result of their efforts, while only 14 percent indicated they were worse off.

Women and adults with annual incomes less than $50,000 have also stated that they had the most trouble managing their finances, regardless of their gender or income level.

Researchers from the Morning Consult found that women and people with annual incomes below $50,000 have the most trouble managing their finances out of all the demographic groups they surveyed for this study.

In the words of Morning Consult financial services expert Charlotte Principato, “headwinds from the pandemic and inflation” explain why many Americans are having problems managing their finances and believe they are in a worse financial situation.

Indeed, the nearly 40-year record high levels of inflation that the United States is currently experiencing may be taking a toll on its citizens’ mental well-being.

In a separate Gallup survey of approximately 4,000 adults in the United States, it was discovered that slightly more than 55% of those asked regarded themselves to be “thriving” between the months of November and December.

This represents a decrease of about 4 percentage points from the 14-year high of approximately 59 percent recorded in June.

Annual inflation increased to 6.8 percent and 7 percent, respectively, during the months of November and December.

However, it is still unknown how big of a financial toll the omicron version, which is believed to be more contagious than the delta type, has had on the economy of the United States. However, certain industries, such as fitness centers, hotels, and tour bus operators, are already asking legislators to provide additional disaster relief cash.

Employees call in sick and clients cancel purchases and bookings, according to lobbyists for the businesses, who allege that the latest increase has forced them to “cut back or shut down operations,” according to the Wall Street Journal.