ST. LOUIS–Nine months into a pandemic-related economic slowdown, many Americans have dug themselves into a much deeper financial hole than where they were at the beginning of the year, according to a new survey.
Clever Real Estate has released the results of a survey of 1,000 Americans seeking to get a pulse on how Americans’ spending habits, credit card use, and debt have changed since 2019 and over the course of the pandemic.
“We found that Americans — particularly Millennials — are struggling financially,” the company said.
Clever noted that a March 2020 Clever Research survey 50% of Americans were worried they’d run out of savings after one month. The news hasn’t gotten better, with Clever pointing out Americans have increased their debt by more than $7,500 this year, and 52% carry a balance on their credit card month over month.
The Key Insights
Among the key insights in the newest Clever research:
- The average American reported having $41,559 in non-mortgage debt and having taken on an additional $7,512 in debt since this time last year
- 52% of Americans carry a balance on their credit card, and 79% of them carry more than $1,000 in credit card debt month-over-month.
- Nearly one-quarter of respondents said they have dipped into their savings to help cover expenses during the pandemic, and 30% have spent more than $5,000 of those savings.
- 81% of Americans agree a second stimulus check of similar value as the first ($1,200) would be a huge help, and 46% of Americans would use a stimulus check to simply pay their bills.
- Millennials are more likely to struggle financially in 2020 than Baby Boomers: They’re three times as likely to miss or defer a credit card payment, two times as likely to miss or defer a mortgage payment, and two times as likely to miss or defer a medical bill.
Where the Money Goes
Clever said it’s “no surprise” many Americans are in debt, considering that people spend the large majority of their income: In 2019, the typical household earned about $68,703 and spent $62,438 on goods and services. According to Clever, the majority of those expenses were spent on necessities such as:
- Housing ($20,506)
- Transportation ($10,410)
- Food and beverage ($8,500)
- Insurance and pensions ($7,354)
- Healthcare ($5,049)
“Despite changes in spending during the pandemic due to business closures and social distancing measures, the overall amount of money people spend hasn’t changed drastically,” Clever reported. “As a result, the respondents in our survey have taken on an additional $7,512 in debt, on average, in the last year, increasing their total non-mortgage debt to $41,559.”
Missing Payments
Clever noted the surge in debt is problematic for a variety of reasons, but most notably because 54% of Americans said they’ve missed or deferred at least one payment in 2020 compared to the 29% who were worried about missing a payment in January.
Clever said those who missed a payment reported missing:
- Student loan payments (45%)
- TV, internet, or phone bills (34%)
- Credit card bills (30%)
- Medical bills (30%)
- Electric, water, or other utility payment (27%)
- Rent (21%)
- Mortgage (21%)
The full survey can be found here.