— Freedom Debt Relief finds that COVID-19 is impacting finances
for 90% of consumers —
SAN MATEO, Calif., May 4, 2020 – As COVID-19 continues to strike at the heart of the nation’s health, results from the most recent Freedom Debt Relief (FDR) survey show that the majority of Americans are reporting notable concerns about their own, and the country’s, finances.
A full 90% of respondents say their financial situation has been impacted by the COVID19 pandemic to some extent; 71% say the pandemic has had a moderate or high impact on their financial situation. Almost half (48%) the respondents say they feel poor or very poor about their current financial security.
Concerns about individual finances extend to the national economy. In a survey conducted in late March, 66% felt the current economic conditions in the United States were poor or very poor. By late April, that figure rose to 76%. Moreover, 46% of Americans think the economy is now in a recession, up from 41% a month ago. Another 35% think the economy is within six months of a recession.
“As COVID-19 has taken hold in the United States, we see that consumers’ optimism about their, and the country’s, finances, has diminished significantly,” says Sean Fox, president of FDR. He cites a survey the company did earlier this year, which found that 70% of Americans indicated overall positive feelings about their financial futures.
Pandemic relief checks are not enough
When asked in late March if the pandemic relief check would be enough to get through the current economy, almost 7 in 10 Americans (69%) thought they would be. Now, only 35% agree that it will be enough.
Looking at all pandemic economic relief measures – including the government checks – 66% of respondents have used at least one measure to date. Besides the government checks, the most-cited measures were collecting unemployment, ability to skip student loan payments, and ability to skip rent or mortgage payments.
“As the virus affects consumers in every economic sector, directly or indirectly, we anticipate a massive need for far more than just creditor assistance or a relatively small one-time check,” says Fox. “Economic solutions will need to be well-thought-out and carefully administered over an extended period of time for consumers to truly get on their feet again.”
From a generational perspective, 52% of those in the 25-34-year-old age group say they are using the pandemic relief check from the government, versus only 37% of those in the 35-44 age group and 38% in the 45-54 age group. More Millennials (47%) than Gen Xers (37%) are using the relief check.
Job losses, income reductions
Nearly a third (32%) of participants say they have experienced a reduction in pay or work hours due to the pandemic. Twenty-nine percent have experienced a furlough, layoff or job loss because of the pandemic.
Of those who have experienced some type of reduction in income, 40% say they have experienced a reduction in income by at least half. Almost 1 in 10 (9%) of workers find their income reduced 75-99%.
Struggle to pay bills
Many people are struggling to come up with the money to pay bills, especially in some key areas.
Turning to credit for essential expenses
Because of the COVID-19 pandemic, respondents anticipate carrying a monthly balance on their credit cards for these expenses.
Hitting hard: 45-54-year olds
Participants in the 45-54-year-old age group may be facing more struggles than other age groups. Eighty-four percent say they feel the current U.S. economic conditions are poor or very poor, versus 75% of those 25-34 years old and 73% of those 35-44 years old.
Similarly, 60% of those aged 45 to 54 say they feel poor or very poor about their current financial security, compared to 46% of those aged 25 to 34, and 48% of those ages 35 to 44. Respondents in the 45-54-year-old age group most often reported (37%) that the COVID-19 pandemic has had a high impact on their financial situation.
More than 4 in 10 (42%) participants in the 45-54 age group say that they are struggling to make rent or mortgage payments; 44% report they will be missing payments on some bills in the next six months. Conversely, 37% of participants aged 35-44 and 33% of those aged 25-34 year olds are struggling to make rent or mortgage payments; 35% of those aged 25-34 think they will miss payments on some bills in the coming months.
Commissioned by Freedom Debt Relief, the online poll of 509 adults in the United States, was conducted by Atomik Research April 22. Respondents were workers who are employed full-time, employed part-time, self-employed/freelancers, homemakers/stay-at-home parents, retirees working part-time, or those who have been unemployed for two months or less. The margin of error is +/- 4%, with a confidence interval of 95%.
Freedom Debt Relief
Co-founded by Andrew Housser and Brad Stroh, Freedom Debt Relief is part of Freedom Financial Network, LLC, a family of companies providing innovative solutions that empower people to live healthier financial lives. For people struggling with debt, the custom Freedom Debt Relief program offers the chance to significantly reduce and resolve what they owe more quickly than they could on their own. For more information about the company and its services, see www.freedomdebtrelief.com/faq.
Headquartered in San Mateo, California, Freedom Debt Relief also operates an office in Tempe, Arizona, and employs more than 2,400. The company has been voted one of the best places to work in both the San Francisco Bay area and the Phoenix area for several years.