Americans have begun to think differently about the value of their money than they did before COVID-19 erupted in the country, Charles Schwab reported Monday.
Asked in January what it took to be financially comfortable, survey participants cited an average of $934,000 in net worth. This shifted down by 30% in June, to $655,000.
And to be considered wealthy? Respondents similarly set the bar lower in June: $2 million in net worth today, down by 23% from $2.6 million in January.
In 2019, respondents said it took $2.3 million to be wealthy, down slightly from $2.4 million in the two prior years.
Americans’ attitudes about money play a role in their overall happiness, but when asked about the most important factor to their overall happiness today, survey respondents drivers of overall happiness in the same order as before the coronavirus outbreak:
- Relationships – 39%
- Health – 27%
- Money – 17%
- Lifestyle – 14%
- Career – 3%
Fifty-seven percent of respondents said the coronavirus has financially affected them or a close family member.
At the same time, 36% said they were likelier to have savings for emergencies and 40% to be saving more in general than before the pandemic’s onset. And 24% were now more likely to make a financial plan.
Although one in three of those surveyed expressed some apprehension about investing, one in five said they were likelier to invest more in the stock market or start investing during this time.
Schwab’s Modern Wealth Survey was conducted online in two waves by Logica Research, each among 1,000 Americans aged 21 to 75. The first wave was conducted from Jan. 9 to Jan. 16, and the second between June 25 and July 2.
“The pandemic and the uncertainty it’s causing are changing how people think about their wealth and planning for the future, but we’re seeing a very productive investor reaction in many ways,” Jonathan Craig, senior executive vice president of Schwab Investor Services, said in a statement.
“In both our survey results and the client behavior we’ve observed since March, we’re seeing a high percentage of people engage with their money and investments, and in many cases seek more help and guidance to make sure they’re on the right track.”
Financial Stress Rises
In the midst of the pandemic, 30% of survey respondents reported that they or a family member had experienced a salary cut or reduced work hours, and 25% said either they or a family member had been furloughed or laid off.
The survey found that millennials were the most affected of all generations in terms of the pandemic’s effects on salary and work hours, with two in five saying they or a family member had experienced one of these issues.
When asked to rate their level of financial stress on a scale of 0 to 100, the response for respondents across all generations was 45.9 at the end of 2019. It June, it had risen to 52.5.
Survey participants also indicated that their increasing stress levels might have a lasting effect, and once the pandemic subsides, they predicted that they would still be more financially stressed than before the outbreak — 49.2 on the scale.
Millennials were the most financially stressed generation in both waves of the survey, while baby boomers were the least financially stressed.
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