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Russia-Ukraine War and money

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Ukraine Crisis Rattles Americans’ Confidence in Economic Recovery: Survey

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What You Need to Know

  • Amid high inflation, 73% of participants believe the war will adversely affect the U.S. economy,
  • Sixty-six percent worry about the effect on their day-to-day finances.
  • Despite these concerns, only 14% reported taking immediate action to change their savings and investment strategy.

Americans are feeling the effects of the Russia-Ukraine war in their pocketbooks.

Seventy-three percent of participants in a recent survey said they believe the conflict in Ukraine will have a negative effect on the U.S. economy, Massachusetts Mutual Life Insurance reported Monday. Sixty-six percent worry about the effect on their day-to-day finances. 

Nearly half of Americans in the survey said they think the geopolitical environment will affect their spending and lifestyle in the coming months.

The Ukraine crisis comes on top of personal finances Americans say are already strained by inflation. Eighty-eight percent of respondents reported that they have seen a rise in food prices, and 80% have had the same experience at the gas pump. 

Nearly half said they have exceeded their budget for groceries since the start of the year. Forty percent have recently dipped into savings. 

Over the past three months, 57% of women surveyed said they have saved less than $500, if anything, compared with 34% of men. Of respondents who saved less than $500 in January, almost half said living from paycheck to paycheck was the reason.

“The conflict in Ukraine and its impact on already high inflation is forcing U.S. consumers to reassess their finances and position themselves to weather potential future economic turbulence,” Michael Fanning, head of MassMutual US, said in a statement. 

“Those who have been able to build good financial habits and shore up their finances during the pandemic will be best positioned during what could be a transitory period.” 

PSB conducted an online survey from Feb. 18 to Feb. 22 among a nationally representative sample of 1,000 U.S. adults ages 18 and older. Following Russia’s invasion of Ukraine, PSB conducted a follow-up survey from March 4 to March 7 among 500 U.S. adults to measure updated sentiment. 

Cautious Spenders

Although many survey participants anticipate a wider economic effect from Russia’s invasion of Ukraine, only 14% reported that they have taken immediate action in changing their savings and investment strategy. 

Of these, 17% of men and 10% of women have made changes to their finances. Men were significantly likelier than women to say the conflict has made them more likely to invest in cryptocurrencies. 

More broadly, 67% of millennials and Generation Xers said they are delaying important purchases because of inflation, compared with 52% of Gen Zers and 44% of baby boomers. 

Even though Gen Z is not leading the overall delay in purchases, 49% of these young respondents said they are delaying the purchase of gifts for others, compared with about a third of their older counterparts. 

Better Positioned for Post-COVID World

Before the onset of the Ukraine conflict, Americans took positive financial steps to help them better position themselves for a post-COVID world, according to the survey. 

Fifteen percent of respondents said their income has increased since the beginning of the pandemic, up from 8% in 2020. Only 19% this year said their income has decreased, versus 40% in 2020. 

During the pandemic, saving and paying down debt also emerged as new financial habits for many Americans. Men, regardless of generation, were more likely than women to save money and pay down debt. 

Millennials, both men and women, were the most likely generation to prioritize saving and paying down debt, the survey found. 

Millennials were also significantly more likely than other generations to adopt positive lifestyle habits. Thirty-eight percent reported that they practiced activities to improve emotional health/wellness and saved by entertaining at home, while 22% developed more meaningful interactions with neighbors. 

According to the survey, Americans entered 2022 with a more optimistic view of their finances. Optimism has increased since the beginning of the pandemic, with 31% of Americans saying they expect their personal finances will improve post-COVID, up from 25% in April 2020. 

Many Americans are eager to leave the pandemic behind them. Twenty-four percent of respondents declared, “It’s time to move on whether the pandemic is over or not,” and 33% said, “The pandemic is on its way to being an endemic like the flu.” 

“With several historic events threatening to hinder finances, consumers are taking pause as uncertainty remains the only constant,” Fanning said. “However, many Americans have made positive financial strides through the pandemic which could lead to renewed optimism once the current conflict ends, and inflationary pressures subside.” 


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