More than half of people with financial anxiety cite pandemic as main cause, according to Discover Personal Loans survey
RIVERWOODS, Illinois – (COMMERCIAL THREAD) – The COVID-19 pandemic has changed the lives of nearly every American, and a new survey from Discover Personal Loans sheds light on how the pandemic is affecting the financial situation of consumers. Fifty-four percent of consumers who reported anxiety about their financial situation say the pandemic is the cause of at least half of their stress. However, Americans didn’t let their worries stop them from taking action to improve their financial future, with 60% of respondents saying they were actively working to improve their financial situation. The Discover Personal Loans survey interviewed 1,500 consumers and was conducted between July 1-8, 2020.
“The pandemic has affected us all in countless ways,” said Matt Lattman, vice president of personal loans at Discover. “With uncertainty, many have paid off their debts and found ways to consolidate their savings, perhaps through budgeting or using a stimulus check. Consumers should pursue these positive steps to improve their financial situation and prepare for the future in order to be prepared for the unexpected.
Sources of anxiety amid the pandemic
Seventy-seven percent of Americans said they felt ready to handle next month’s bills, and 59% said they felt financially well enough to handle short-term unemployment. However, a quarter of Americans still report having less than $ 500 in their savings, and more than half say they don’t feel ready if they were to lose their jobs or face an unforeseen expense of $ 5,000 (54 % and 52% respectively).
Of those who have reported financial stress from the COVID-19 pandemic, nearly half are most concerned about its impact on their ability to pay daily expenses. The impact of a volatile stock market on their retirement plan and lack of emergency savings are also major concerns.
Americans’ strategies for improving their finances
Saving money is the most notable way Americans strive to improve their finances. In fact, 43% say they have taken this step; an increase of 6% compared to 2019.
Americans are also focusing on reducing spending, paying down debt, and tracking spending. However, few reported consolidating their high interest debt or using online tools to manage their finances.
“While basic budgeting behaviors and even stimulus checks can go a long way in keeping your finances day to day, leveraging products and technologies to consolidate and pay off high interest debt can help make money. more ambitious financial goals more achievable ”Lattman continued. “For many, personal loans can help reduce monthly payments, allowing consumers to use their savings to build emergency funds and manage daily expenses.”
In fact, a separate study of Discover Personal Loans clients found that consolidating high-interest debt can help reduce financial anxiety, as 82% of clients who consolidated their debts with a Discover personal loan said they felt less stressed – and 73% of clients said that using Discover Personal Loan to Consolidate Debt Improved Overall Credit1.
About the survey
The national survey of 1,500 U.S. consumers aged 18 and older was commissioned by Discover and conducted by Dynata (formerly Research Now / SSI), an independent survey research company, between July 1-8, 2020. The maximum sampling error margin was +/- 3 percentage points with a 95% confidence level. Generations are defined as: Generation Z, born after 1997; millennials, born between 1981 and 1996; Generation X, born between 1965 and 1980; and baby boomers, born between 1946 and 1964.
Discover Financial Services (NYSE: DFS) is a digital banking and payments company with one of the most recognized brands in US financial services. Since its inception in 1986, the company has grown into one of the largest card issuers in the United States. The company issues the Discover Card, a pioneer in cash rewards in the United States, and offers private student loans, personal loans, home loans, checking and savings accounts, and certificates of deposit through its banking operations. It operates the Discover Global Network comprised of Discover Network, with millions of merchant and cash access points; PULSE, one of the country’s main ATM / debit networks; and Diners Club International, a global payment network accepted worldwide. For more information visit www.discover.com/enterprise.
1ABOUT THE SURVEY
All figures are from an online customer survey from September 9 to 23, 2020. A total of 703 Discover personal loan debt consolidation customers were asked about their most recent Discover personal loan. All results @ 95% confidence level. The respondents opened their personal loan between April and July 2020 in order to consolidate their debt.