Financial Flops: A shocking 30% of Americans don’t have a safety net greater than $400
Half of Americans (55%) would qualify 2020 as a personal financial disaster.
The survey asked 2,000 Americans what their financial status and future financial goals for 2021 were after 59% said 2020 was a year of financial setbacks for them.
Seven in ten said their financial priorities have changed from the start of 2020 to now. For 63 percent, this year has permanently changed their financial priorities.
More than six in 10 (65%) of people say they’re depending on 2021 to recover financially from the setbacks they’ve experienced this year.
For nearly four in 10 (37%) respondents, that includes making serious cutbacks.
Nearly three-quarters of people (74%) have had to shift their financial priorities this year because of emergency expenses and medical expenses.
Half said putting more money aside has gained new importance to them due to their experiences in 2020. Almost as many (48%) said saving for an emergency fund was a new priority this year, as well.
Commissioned by World Finance and conducted by OnePoll, the survey found on average, Americans need a minimum of $10,726 in savings in order to feel financially comfortable.
Almost two-thirds (63%) of respondents believe it will take longer than a year to reach just one of their financial goals. On average, people think it will nearly be 2024 before their goals are met.
Of the employed respondents (59% in total), seven in 10 say they need a raise at their job in order to make ends meet. Over 60 percent (62%) said they plan on taking on a second job in 2021 to meet their financial goals next year.
For 60% of respondents, rebuilding their savings tops the list of financial resolutions to accomplish in 2021. It’s closely followed by becoming debt-free (56%), improving their credit score (53%) and starting an emergency fund (51%).
More than half (55%) of Americans say they need advice on how to budget properly. Nearly three-fourths (74%) of them hope to improve their financial literacy in 2021.
Three in ten plan to set up automatic savings to make their money dreams come true.
Only 15% of people say they have an excellent knowledge of finances. Over 40 percent (41%) say their knowledge is good, but not the best. Close to two-thirds of all respondents (63%) regret not taking their finances more seriously sooner.
“Ringing in the new year provides the opportunity to reflect, learn and plan for financial resolutions as we look ahead to 2021. We encourage Americans to take advantage of available financial literacy resources to create manageable budgets that fit their immediate and long-term needs,” says Chad Prashad, president and CEO of World Finance.
Nearly 30% of Americans do not feel that they have the safety net or resources available to cover a financial setback greater than $400.
Over half (54%) of Americans have used credit cards to borrow money for a short-term expense. But a third of Americans fear high-interest rates and an inability to repay when taking out a short-term loan.
“The new year represents a fresh start, new beginnings and the opportunity for Americans to prioritize their financial well-being and start getting back to the good in life. World knows taking out a loan can be an intimidating process. When faced with a financial emergency, it is important to have a reputable partner to turn to for a quick solution,” says Prashad. “An improved credit score is important to increase their options as well as increase their credit limits and reduce interest rates.”
Forty-five percent of respondents expect to take out a loan for one reason or another in 2021. Nearly half of respondents ranked the ability to get cash fast the most important criteria when considering taking out a personal/short-term loan.
WHAT ACTIONS ARE PEOPLE TAKING TO MEET THEIR FINANCIAL GOALS?
- Making serious cutbacks 37%
- Begin investing 34%
- Meeting with a financial advisor 31%
- Setting up automatic savings 30%
- Taking out a loan 27%
- Taking a second job 26%
- Moving 23%
- Consolidating debt 22%
- Return to school for myself 11%
- Selling valuable items 9%
CREDIT SCORES FOR AVERAGE AMERICANS
- Subprime 500–600 26%
- Prime 661–780 20%
- Near prime 601–660 19%
- Deep subprime 300–499 15%
- Super prime 781–850 13%
- No credit 7%
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