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It's been over a year since the coronavirus pandemic started, and in that time consumers have experienced unprecedented change. Starting as a public health crisis, the COVID-19 pandemic quickly impacted the economy and sowed widespread anxiety among Americans over the health of their personal finances.
Since the onset of pandemic, much has shifted—including consumers' concern over how COVID-19 might impact their lives. To better understand how we can help people manage this difficult period, Experian surveyed 966 U.S. consumers to learn more about their financial concerns during the pandemic and how their sentiment has changed over time.
This survey was conducted in February and March of 2021 and is a follow-up to Experian's survey from March 2020, which posed the same set of questions to a group of 1,400 people.
Worry Over COVID-19 Impact Down Since March 2020
Though two-thirds of survey respondents reported that the pandemic had at least a small effect on their finances, overall concern about the financial and health impacts of COVID-19 is down since the start of the pandemic.
The portion of respondents feeling "extremely" concerned about the coronavirus dropped to 28%—down from 43% in March 2020, according to Experian's survey. The portion that felt "extremely" concerned about the economy is down to 26%—a decrease from 34%.
Along with these drops in concern over the virus and its economic impact, consumers reported being less worried about things like their family's health, their personal finances and their credit. That said, over half of respondents are still feeling uneasy in at least a couple of these areas. The portion of consumers worried about their family's health dropped by 14 percentage points, moving from 82% to 68% in the past year. Meanwhile, 55% said they were worried about their personal finances, down from 69% in March 2020. And 37% said they were worried about their credit, down from 47% last year.
Most Consumers Say They Can Cover Upcoming Bills
When it comes to the ability to pay bills, 74% of those surveyed said they would be able to cover their payments in the coming three months. Another 12% said they wouldn't be able to cover their bills, and 14% said they were unsure.
In total, 26% of respondents reported being either unsure of whether they could cover their upcoming bills, or said they were sure that they wouldn't be able to. While it's troubling that more than a quarter of the group was still struggling to cover payments, the March 2021 survey showed a 12% improvement over last year, which indicates more people are confident in their ability to manage their obligations.
Among the respondents unsure about being able to make bill payments, the biggest concerns were covering utility, credit card and rent payments: 36% said they might not be able to cover utility bills; 33% said their credit card bill was a concern; and 31% worried about their rent payments.
Consumers Spending Changed Since Start of Pandemic
Spending patterns have also changed since the onset of the pandemic. The portion of consumers spending more on groceries and in-home entertainment is down since March. And the percentage of respondents spending more on restaurants, clothing and gifts has increased, according to Experian's survey.
In total, 42% of recently surveyed respondents said they were spending more now on groceries than they did before the pandemic; since March 2020, this number was down 7%. Another 25% said they were spending more now on in-home entertainment than they did before the pandemic, also down by 7%.
On the other end of the spectrum, 11% of consumers surveyed said they were spending more on clothing now than before the pandemic—an increase of 5% since March 2020. Increases also occurred in the portion reporting they're spending more now on gifts: 6%, which is a 4% increase since March 2020.
Half of Stimulus Recipients Will Use Funds for Monthly Bills
When asked how they planned to use federal stimulus funds—specifically the payment that started going out in December 2021—50% of those that received or anticipated receiving the payment said they would use it to pay down current monthly obligations, including bills and loan payments.
When compared with how they answered this question in March 2020, the ratio of consumers planning to use their stimulus for monthly obligations dropped by 9%—showing that consumers may have more financial flexibility now than they did before.
The other primary use of stimulus check money was contributing to savings: 44% of those that received or anticipated receiving a stimulus check said they would use the payment to increase savings.
The rest of the group reported various uses for the stimulus payments, including 9% saying they'll use it for shopping and entertainment; 7% for investments; 5% for a large purchase; 5% for vacation; and 5% for something else.
Check Your Credit if COVID-19 Impacted Your Finances
If you've been financially impacted by the pandemic, or are curious how or if your credit has been affected by any changes to your financial life, consider getting a free copy of your credit reports and scores from Experian to get an updated view of your how you're doing, and consider free credit monitoring from Experian to keep an eye on your credit going forward.