As the U.S. economy continues its steady recovery from the pandemic, a new survey has shed some light on how quickly that recovery is helping the broader population. Northwestern Mutual's annual survey of Americans' attitudes toward money shows that while a majority of people in the U.S., 58%, are still in "financial recovery mode" from the pandemic, almost all of those people, 89%, have confidence that they will attain a secure financial future.
Americans are also feeling better than they were a year ago: When respondents rated their financial security on a scale of 1 to 10, the average response was 6.5 — up from a pandemic low of 6.1 in April 2020.
That's just one of many indicators in the survey that Americans are feeling pretty good about their money right now. It's a welcome surprise, says Christian Mitchell, chief customer officer at Northwestern Mutual. "The journey that we've been on, as individuals, as a country, and as a globe, over the last year has been pretty wild," Mitchell says. The survey results "are a testament to human ingenuity, and people's ability to kind of take a punch and dust themselves off."
Last year, 4 in 5 Americans told Northwestern Mutual that they believed they would financially recover from the pandemic. Nearly half of those who shared that belief, 44%, said it would take a year or less. About a third, 32%, said it would take between two and five years.
Those predictions seem to have held up pretty nicely. This year, almost half of people in financial recovery mode said they've begun making up ground from their pandemic losses, even if they haven't yet reached pre-pandemic levels of stability. Another third say they have mostly, if not fully, recovered from any pandemic-related financial losses they endured.
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That positive outlook probably stems, at least in part, from the good financial habits that Americans picked up during the pandemic, like saving diligently, Mitchell says.
His hypothesis is backed up by the numbers: Last year, the personal savings rate — the share of income that Americans put away for rainy days — spiked to levels not seen in decades, according to data from the Bureau of Labor Statistics.
The key question will be whether those good money habits stick, Mitchell says, and if people use this rebound period to maintain their discipline.
"Will the savings level that we've observed persist? [It's] probably going to get reduced somewhat; some of the savings were forced," Mitchell says. "But I really hope that people, as they adjust to this post-Covid world, take this very deliberate and intentional approach with what they want to do and what they don't want to do."
When Northwestern Mutual released its survey results for 2020, Mitchell said that people should use their pandemic downtime to "clean out the dirty basement of [their] financial life," just as they might clean out the basement or garage of their home.
Now that it feels like the U.S. is on its way out of the pandemic, Mitchell says that money metaphor still holds true. Keep saving, keep investing, and make sure that money-related tasks don't pile up, he urges.
"Keep your basements clean going forward," he says, "rather than letting them get cluttered and having to do the superintense, Saturday-long clean-out."
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