In Pandemic Times, a KeyBank Survey Shows Americans Are Financially Resilient
We know: 2020 was tough. As the pandemic unfolded, many Americans faced economic setbacks beyond their control or struggled with believing that their financial goals were still within reach.
We know because we asked. And what we heard from more than 1,200 respondents to the KeyBank 2020 Financial Resilience Survey is encouraging.
You might be surprised to learn that a majority of consumers felt they were on more solid money ground as the calendar flipped to 2021. Fifty-three percent of the KeyBank survey respondents – who were between the ages of 18 and 70 – reported that they were more financially confident as they approached the end of 2020, compared to the beginning of the year. And nearly half said they were more financially aware because of challenges faced during the pandemic.
How did that happen? It happened because Americans are paying closer attention to their needs and priorities, making smart changes to their habits and taking care of themselves – which leads to better financial decisions.
Since it’s important to keep building on that momentum and resiliency, let’s look at some of these KeyBank consumer insights and what can be learned from them.
Awareness Creates Confidence
Household finances were thrust front-and-center last year due to unpredictable employment situations and business struggles. One result is that because of the increased attention on income and expenses, consumers got a better picture of their full situation, and worked to put plans in place to get on more solid fiscal ground.
While just 16% of people considered themselves to be a financial expert in 2020, 49% reported either slight or significant increases in their financial awareness over the course of the year. With that awareness came a "play it safe" approach that led to changes in saving and spending:
- 40% of respondents said they were spending less and saving more.
- 71% said they were spending less on discretionary items like travel and dining out.
- As a result, more than three-quarters of respondents (78%) said they are "cautiously optimistic" when it comes to their finances.
With so many families’ finances affected, 2020 saw a boom in conversations about budgeting, seeking financial advice and even the basics of simply talking about money. At KeyBank, you can always get in touch with an advisor or use tools like our Personal Debt Consolidation Calculator.
Several conclusions point to the importance of using resources like these to plan ahead: Those who reported being more confident at the end of 2020 were more likely to save for an emergency than those who were less confident – and more people felt that they could better save for an emergency in 2020 than in the year before. Additionally, more than half (51%) of people were confident they could come up with $2,000 in the next month to meet an unexpected need. That was up from 42% at the end of 2019.
How We Changed Our Habits
With the nationwide reduction in everyday face-to-face interactions – visiting your local KeyBank branch in person, for example – Americans embraced digital banking tools, from budgeting apps to online banking and mobile deposits.
- 35% of those surveyed said digital banking tools helped make them feel more financially resilient during the pandemic.
- 44% said they are "extremely comfortable" with those tools.
- A dominant 85% said they are likely to continue using digital tools to conduct some or all of their financial transactions going forward.
In knowing more details of our finances, we also cut back on money missteps: While half of the people surveyed admitted to making a financial faux pas in 2020, impulse buying – the top slip-up – was down 5% from the year before.
Making this a particularly effective progress marker is the fact that with surges in online ordering and restrictions on out-of-home activities, Americans had more reasons to impulse buy during the pandemic. That said, there’s always room for improvement: Paying for subscription services you don’t use is another faux pas that was impacted by the pandemic – and this was up 3% from 2019.
Americans protect themselves from financial faux pas in three ways: identifying and prioritizing their needs versus their wants, creating a monthly budget, and growing more comfortable talking about money. To that last point, most people prefer to deal with money mistakes head-on, whether it’s open communication with someone they trust, such as their spouse, or by diving into budgeting and demonstrating their resilience.
The Role of Self-Care
It’s true: Quality rest, regular exercise and financial education set you up to make better financial decisions. But don’t just take our word for it:
- 38% of our poll respondents said a good night’s sleep made them feel more financially resilient during the pandemic.
- 27% said proper diet and exercise habits contributed to that feeling of resilience.
- 16% practice daily mindfulness techniques to help them feel more resilient.
Taking care of our bodies and minds has a strong correlation with our ability to weather the financial storm and make smart money decisions. Why? Because focusing on what we can control – such as sleep, physical activity and general mindfulness – helps establish the clarity and strength necessary for dealing with many of the circumstances we cannot control.
"There is a clear connection between mental wellness and feeling financially strong. To support that connection, banking information and tools need to be delivered to clients with the ease that allows them to address their finances on their own terms," said Chris Manderfield, Executive Vice President at KeyBank.
He continued, "We understand that each client and their circumstances are different, and human-powered technology can contribute to their resilience, especially in tough times. That’s why KeyBank is investing in the function and security of our online and mobile banking and combining our digital tools with the expertise."
None of us are alone in the financial challenges we’re facing, and KeyBank has the tools and financial education to help you grow your resiliency and be prepared for the brighter times that are sure to come.
About the KeyBank 2020 Financial Resilience Survey
The KeyBank 2020 Financial Resilience Survey polled 1,204 Americans ages 18 to 70, between September 30 and October 2, 2020, via an online questionnaire distributed by Dynata and hosted by Vision Critical. The survey asked respondents about their financial attitudes, understanding, awareness and actions over the prior year.