FlexJobs & Prudential Survey: COVID-19 & Personal Finances
It’s no secret that the pandemic has changed our way of life. From where we work to how we shop, COVID-19 has had a major impact on everything. It’s also hard to deny that the coronavirus has had an outsized impact on employment in the U.S. Though the unemployment rate has fell, the economic future is uncertain.
To understand how the pandemic is affecting the finances of U.S. workers, FlexJobs and Prudential partnered for a survey of 1,100 FlexJobs members in June 2020 to find out how their finances are faring during the pandemic.
Financial Insecurity in America
With the pandemic in full swing and the unemployment rate hovering at historic highs, many people find themselves in financially insecure situations. Nearly two-thirds of respondents (62%) said that they do not have enough emergency savings to last six months.
Almost half (46%) of respondents said their emergency savings wouldn’t last more than three months, with nearly one quarter (24%) admitting their savings wouldn’t last them even one month.
“The pandemic exposed the widening gap between the financially secure and insecure,” said Jake Biscoglio, Vice President of Strategic Growth Initiatives at Prudential.
What the Pandemic Costs Workers
Our survey found that over half of respondents (53%) are earning half or less than half of their pre-pandemic income. Approximately one-third (31%) have lost their entire income.
When asked to compare how they felt about their finances pre-pandemic compared to their current situation, 24% felt that they struggled before the pandemic, but 44% feel they are currently struggling with their finances. Additionally, 21% of workers felt financially secure before the crisis, whereas only 10% feel financially secure now.
We also asked what people thought about financial wellness and what barriers stood in their way of achieving it. While two-thirds of workers say financial wellness should be a priority and 50% feel prepared to make informed decisions about their financial wellness, many workers face obstacles to achieving those goals.
Income, or a lack of it, is the largest barrier workers face, with 44% saying that they don’t earn enough money to achieve their financial goals. Another 35% report a high cost of living as their main barrier, while 26% cite too much debt. A lack of access to workplace benefits (like paid time off and employer-provided health insurance) was also cited as a problem for 15% of the respondents.
How Workers Are Surviving Financially
To make ends meet, 84% of workers say they are taking concrete steps to shore up their finances until the pandemic ends. Though 49% of workers are searching for additional income streams (like a side job to supplement their current work), 28% are filing for unemployment.
Another 23% are dipping into emergency savings to make ends meet. However, for some, adjusting their finances means adjusting their retirement plans. One out of five workers has changed their retirement contributions, including reducing or stopping contributions to those retirement accounts or, for 8% of respondents, taking withdrawals.
Steps You Can Take
Though everyone is at the mercy of the coronavirus, you can take some actionable steps to set yourself up for financial success now and in the future.
Consider gig work, freelancing, or part-time work as a way to help make ends meet. Many of these jobs can be done from the safety of your home. Almost one-quarter of survey respondents (24%) are using remote work to supplement their income. Some of these jobs also offer flexible hours, letting you combine one or more jobs to make up for an income loss.
One of the obstacles standing in the way of financial wellness is a lack of knowledge about what to do and how to do it. When asked, 27% of our survey respondents say they don’t know how to evaluate the different financial options out there, with 23% not knowing what options are even available to them.
As part of our partnership with Prudential, FlexJobs is providing resources to help people learn and understand what they can do to take the first steps toward financial security. Our financial wellness webinar can help you figure out how to get a handle on your finances during the pandemic and what to do with your 401(k) when you change jobs.
And consider joining FlexJobs to help you locate remote and flexible jobs. Full-time, part-time, and freelance job postings are updated every day. You can also attend virtual career fairs, meet with one of our career coaches, and take advantage of other members-only benefits.
The coronavirus has altered our everyday lives in large and small ways. While we can’t control what happens with the pandemic, we can take positive steps toward a more stable financial future.
Our financial wellness center provides additional resources with helpful information on everything from health insurance to which financial lessons you should teach your kids.
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