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How COVID-19 Shaped Financial Confidence in 2021


Year two of the pandemic was no easier than the first. But with vaccines widely available and jobs coming back by the tens of millions, Americans got the chance in 2021 to evaluate the toll (so far) of COVID-19 on their finances.

About one-fifth of Americans report experiencing a negative financial impact from the pandemic, such as losing their job, according to a recent Harris Poll survey* commissioned by Personal Capital and Empower. As a result, this group is more than twice as likely as those who reported experiencing a positive financial impact, such as increased savings, to say they’re in “survival mode” now.

It’s reassuring, however, that 4 in 10 of those who were negatively impacted said their confidence in their financial health journey has increased in 2021. Yet, more than 8 in 10 said it will take them a while to feel fully financially confident.

There is at least one silver lining of the turmoil brought on by COVID-19: Regardless of the pandemic’s impact on their money, the majority of Americans we surveyed said it prompted them to pay more attention to their financial wellness.

Who Was Most Likely to be Negatively or Positively Impacted?

The pandemic wasn’t a setback for every American, financially speaking. About 13% of survey respondents said COVID-19 had a positive impact on their finances, compared to 16% who said it negatively impacted their money.

Here’s a look at a few personal and financial aspects of those who were impacted.


In general, American adults in their teens, 20s, and 30s fared better than older Americans — except for those 65 and older — during the pandemic when it came to experiencing an extreme financial event.

The age group that COVID-19 hurt the most financially? Near retirees.

Age Groups
“I have experienced a positive financial impact due to the pandemic.” (e.g., increased income or savings)
“I have experienced a negative financial impact due to the pandemic.” (e.g., job loss)

Access to Financial Advice

Working with a financial advisor may have given some people a leg up in navigating the chaos of the COVID-19 era. Surveyed Americans who said they experienced a positive financial impact were more likely to have access to professional advice through their job, work with a dedicated financial advisor, or use online tools to manage their money.

Student Borrowers

Despite a moratorium on federal student loan payments that’s been in effect for nearly two years, almost one in five surveyed Americans with student loans said the pandemic still negatively impacted their finances.


People who were financially impacted in a negative way by the pandemic are far less likely to have a good or excellent credit score today — a total of 61% of negatively impacted respondents versus 88% of positively impacted respondents.

Though mortgage and student loan payments were paused by federal law, credit card companies and other lenders were still collecting throughout the pandemic, which could have further affected the credit scores of those who lost a job or took a pay cut and weren’t able to pay bills on time or in full.

Overall, Americans’ credit is in strong shape. Nearly three-fourths (73%) of survey respondents report having a good or excellent credit score today, an indication that the government’s financial relief measures were broadly successful.

Read More: What is Debt Management?

Health Coverage

People who were negatively impacted by the pandemic are less likely to have health coverage today — 10% of negatively impacted respondents compared to 3% of positively impacted respondents. This could be a result of losing job-related insurance.

Financial Confidence and Outlook

Amidst the rapid spread of yet another COVID-19 variant, inflation concerns are still present, mostly among lower-income households who allot a greater portion of their budgets toward items that are getting more expensive.

Here’s a look at how our survey respondents are feeling about their finances.

Financial Health

Financial health is a broad concept, but it’s typically regarded as a measurement of how a person feels about their ability to stay current on bills and meet financial goals.

Unsurprisingly, surveyed Americans who reported a positive impact from the pandemic generally feel very good about their money today. When asked to rate their financial health on a scale from 1 to 10, the median response was 8 — meaning that more than half of the respondents feel they are at near or complete financial health.

Meanwhile, the median response among those who experienced a negative impact from the pandemic was 5.

When asked about their current relationship with money, a full quarter of surveyed Americans said they’re optimistic and ready to grow, while 21% said they feel in charge, 36% said they feel stable, and 18% said they’re barely keeping their head above water. The outlook is more dire among those who suffered a negative financial impact at the hands of the pandemic — more than a third said they’re barely keeping their head above water.

Try It: Monthly Budget Calculator

Retirement Savings

Early lockdowns halted spending on entertainment, travel, and dining out for most people. In situations where that money wasn’t needed for immediate expenses, it was often redirected to savings and investments. Despite panic around the latest coronavirus variant Omicron, the S&P 500 ended 2021 up by 27%, producing a hearty return for Americans invested in stocks.

About two-thirds of surveyed Americans who reported a positive financial impact from the pandemic, such as increased savings, are somewhat or very confident in their retirement savings today. Only 36% of surveyed Americans who reported a negative financial impact feel the same.

Economic Confidence

Zooming out to a macro level, surveyed Americans feel so-so about the economy. Overall, only 4 in 10 said they’re somewhat or very confident in the state of the economy. Inflation could be to blame. The U.S. inflation rate rose 6.8% in 2021, driving up the cost of household staples like groceries and diapers and even cars and gasoline.

Tips for Getting Back on Track

Good financial health is like getting in physical shape: The task is never complete. You have to work at it every day. If you experienced a financial setback during the pandemic, here are four steps for improving your financial health.

1. Prioritize your emergency fund.

Savings is a primary indicator of financial health. Knowing you have cash to fall back on if you lose your job or get hit with unexpected bills goes a long way in shoring up confidence.

If you were one of the few Americans with an emergency savings account before the pandemic hit, you probably had to dip into it sometime over the last two years. If you didn’t have a safety net, you know how quickly a financial hiccup can turn from bad to worse.

Now is the time to start building (or rebuilding) your emergency fund. Contribute as much as you can, even if it’s just $20 a week, to a dedicated savings account.

Read More: How Much Should You Have in an Emergency Fund?

2. Plan ahead.

Chances are you pushed aside any goals that weren’t immediate and necessary when the pandemic threw you a financial curveball. Utilize the perspective of a new year to revisit your budget and your goals to decide what to focus on next.

While we’ve become used to living in a permanent state of uncertainty during the pandemic, each day is an opportunity to get ahead. For example, even though the federal student loan forbearance has been extended until May, spend time now looking into alternative repayment options. With tax season and who knows what else on the horizon, lighten your load by putting a plan in place before the deadline rolls around.

Read More: How to Prepare For Student Loan Payments Resuming in May 2022

3. Take advantage of the job market.

Overall, nearly a third of Americans we surveyed said not getting paid enough is one of the biggest roadblocks to achieving optimum financial health. Luckily, there’s a lot of opportunity for jobseekers in 2022.

Employers in several industries — namely manufacturing, leisure and hospitality, transportation and warehousing, and business and professional services — are desperately looking for talent and upping pay to sweeten the deal.

Now is not the time to demur from applying for a role in which you only partially meet the “requirements,” including where you live. Thanks to pandemic-era changes like remote work flexibility, many companies are more willing than usual to widen their candidate pool.

4. Find an accountability partner.

Whether you confide in a family member or friend or hire a financial advisor, consider sharing your financial goals and plans with someone you trust.

Hoping to curb your takeout spending in 2022? Enlist a friend who you can text every time you get the urge. Curious about investing in the stock market but too nervous to start? Find a fiduciary financial advisor who can help you devise a strategy, open an account, and start growing your money.

Your accountability partner doesn’t have to be human. There are numerous online tools and apps that can help you save more, invest wisely, and build better money habits next year and beyond.


Author is not a client of Personal Capital Advisors Corporation and is compensated as a freelance writer.

* Survey Methodology: This survey was conducted by The Harris Poll on behalf of Empower and Personal Capital from October 29 to November 3, 2021. We surveyed 2,006 U.S. citizens ages 18+. This study also references data from prior research, including a study conducted from March 23, 2021 to April 8, 2021 with 2005 respondents; a study conducted from November 25, 2020 to December 11 among 2008 adults; and a study conducted from December 18 to December 30 among 2001 adults.

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. Compensation not to exceed $500. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money. Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

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