During the pandemic, many Americans saw their financial situations improving. As a result of stimulus checks, enhanced unemployment benefits, student loan and mortgage forbearance combined with business shutdowns during the lockdown phase, many Americans were able to build up savings and pay off credit-card debt.
But now there are early signs that the tides are beginning to turn.
Overall, 27% of U.S. adults ended the year worse off financially compared to 25% who ended better off. Additionally, 37% of adults found it harder to manage their finances, according to a survey of 2,200 U.S. adults published Tuesday by the Morning Consult.
Women and adults with an annual income below $50,000 said they ended 2021 worse off financially they started it.
Some 31% of women said they ended the year worse off while some 20% said they ended the year better off financially. A greater share of men (30%) said they ended the year better off while 24% said they ended worse off.
Some 33% of adults with annual income below $50,000 said they ended worse off compared to some 19% who said they ended better off. Meanwhile, 42% of adults who earned at least $100,000 last year said they ended better off and just 14% said they were worse off.
“Women and adults with annual income below $50,000 also indicated they have the most difficulty managing their finances across all demographic groups.”
Women and adults with annual income below $50,000 also indicated they have the most difficulty managing their finances across all the demographic groups analyzed by researchers at the Morning Consult.
Morning Consult financial services analyst Charlotte Principato said “headwinds of the pandemic and inflation” explain why many Americans are having difficulty managing their finances and feel they are worse off financially.
Indeed the nearly 40-year record high level of inflation Americans are dealing with may also be taking a toll on their mental well-being.
A separate Gallup survey of nearly 4,000 U.S. adults found that just over 55% of those polled considered themselves to be “thriving” during November and December. That’s down nearly 4 percentage points from the 14-year high of approximately 59% measured in June.
Over November and December, annual inflation surged to 6.8% and 7%, respectively.
It’s unclear yet how much of a toll the omicron variant, which is believed to be more contagious than the delta variant, has taken on Americans financially. But already some businesses — including fitness centers, hotels and tour bus companies — are lobbying lawmakers for more relief funding.
Lobbyists for the businesses are claiming that the latest surge has caused them to “scale back or shut down operations as employees call in sick and customers cancel orders and reservations” The Wall Street Journal reported.