73 percent of Americans still haven’t bounced back financially from the COVID-19 pandemic
A majority of Americans havent recovered financially from the COVID-19 pandemic. (iStock)
The COVID-19 pandemic continues to have lasting effects, and not just on the health of Americans. Almost three-quarters of Americans (73%) are struggling financially, mainly due to the aftermath of COVID-19, according to a Real Estate Witch study conducted by Clever.
This lack of financial stability has led many Americans to forgo saving, causing 44% of working families to live paycheck-to-paycheck, the Clever study cites. The pandemic heightened this need, as 75% of Americans reported living paycheck-to-paycheck during the pandemic.
Any savings the average American had are becoming obsolete. Thirty percent of those surveyed in Clever’s study pulled from their emergency savings to cover bills and other basic costs.
Even more Americans have no savings to pull from in the first place. Forty-five percent of those surveyed have no current savings while 29% never had any to begin with.
When you need help covering emergency costs or basic living costs, avoid high interest debt that’ll cost you down the line. Consider a low-interest personal loan instead. Credible can help you find your personalized personal loan rates from multiple lenders all at once.
HERE'S HOW YOU CAN MAKE YOUR 2024 FINANCIAL GOALS A REALITY
Lower basic living costs and more stimulus checks could help relieve financial stress
Although student loan forgiveness is a hot topic that many Americans are currently discussing, not many believe that would solve their financial problems.
Clever’s study found that the general cost of living dropping is the number one way Americans could see their finances recovering. Seventy-four percent of Americans claimed that costs like mortgage payments and groceries dropping would help them most financially.
Next to basic costs going down, many Americans want more stimulus checks to help them get through tough times. Fifty-nine percent of those surveyed claimed another check would help provide some financial relief, however temporary.
As with any conversation around rising costs, Americans cited inflation going down as the next most beneficial move that could help their finances. This isn’t nearly as high on the list, though, with 33% of respondents claiming lower inflation as the most helpful for their finances.
One way to reduce financial stress is to rid yourself of high-interest debts like credit cards. Consolidating your debt into a low interest personal loan can help you do just that. Visiting Credible can help you compare debt consolidation options to find the best personal loan rates for you, based on your credit score and credit history.
AMERICANS LIVING PAYCHECK TO PAYCHECK OWN 60% OF CREDIT CARD DEBT: SURVEY
Credit scores managed to increase during the pandemic, and are still up
Despite other financial struggles plaguing the country, credit scores managed to go up during the pandemic and remain steady years later, according to the Consumer Financial Protection Bureau (CFPB).
Between June 2019 and June 2020, average credit scores went up slightly from 699 to 710. Currently, the average FICO® credit score sits at 718 as of April 2023. This is higher than pre-pandemic levels. Back in 2015, the average score sat at 696, while years earlier, in 2005, the average score was 688, according to FICO® data.
This increase in score comes from a few different factors. For starters, the average credit utilization ratio declined by 2.4% during the pandemic. Since the amount of credit you’re using has a major effect on your score, this decline in credit usage helped Americans' scores.
Additionally, likely thanks to the student loan pause and leniency by creditors, delinquencies on credit reports also decreased by 2.2% during the pandemic, according to the CFPB. With fewer delinquencies on their reports, Americans' scores rose slightly.
One of the best ways to help your finances is to get out of debt, particularly debts with high interest rates. A debt consolidation loan can help you score a lower rate and get out of debt more quickly. You can plug in some simple information into Credible's free online tool to determine if a debt consolidation loan is your best option.
CONSUMERS FEEL MORE CONFIDENT ABOUT FINANCES AND READY TO SPEND MONEY: SURVEY
Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.