President and CEO, National Endowment for Financial Education
The United States is experiencing a public health and economic crisis at once, and statistics show Americans are worried about their financial futures. Financial literacy educators can help.
The COVID-19 outbreak is an unprecedented event inciting strain on our physical, emotional, and financial well-being. Americans are worried about their money and are taking steps to adjust to their new normal. In response, there has been a pivot within the financial education community to keep services available to teachers and learners, as well as developing plans to respond to the millions who will need support as they work toward recovery.
And the need will be great.
A survey from the National Endowment for Financial Education (NEFE) finds nearly nine in 10 (88 percent) Americans say they are experiencing financial stress in the wake of COVID-19. More than half (54 percent) are concerned about not having enough saved, while almost half (48 percent) are worried about their ability to pay bills. At the time of release of the survey, three-quarters of Americans were taking steps to adjust their finances because of the virus. Two in five have cut expenses, 26 percent are delaying major financial decisions and 22 percent have increased contributions toward savings. Additionally, nearly one in three say they are concerned about income loss or reduced income, and one in four say they are worried about financial market volatility. The level of worry due to COVID-19 is consistent for those on opposite ends of the income spectrum. Nearly eight in 10 (79 percent) with household incomes (HHI) less than $50,000 per year say they are at least somewhat concerned about their finances, compared to the same percentage for those with HHI over $100,000 per year. Those earning between $50,000-$100,000 HHI annually are somewhat less concerned (73 percent).
Historically, Americans are confident about the future whatever their current circumstance. However right now, pessimism about money is pervasive, as two in five report they are “very/somewhat worried” about what their financial situation will be 12 months from now, compared to one in three who are “very/somewhat optimistic.”
Following the onset of the Great Recession in 2008, financial educators adjusted and redeployed change agents to respond to that economic downturn. Today we already are witnessing many quality organizations and practitioners — financial literacy programs, researchers, associations, counselors, and planners — working with families to provide pro bono assistance. Educators and advocates are developing strategies to lend a calm, guiding hand to those who will need help in the months and years to come. But these efforts should extend to the home front too. Children are paying attention to what is going on in the household, so it is essential during this crisis to have regular conversations about how your family is being impacted. Parents should be as transparent, and calm, as possible.
These examples of leadership and action are what is needed most at this time.