The Coronavirus pandemic has been incredibly challenging for Americans across all age groups.
According to the Pew Research Center, 40 percent of Millennials said that either they, or someone within their household, had become unemployed or had a cut in pay because the effect COVID-19 had on the economy.
The younger generation fared even worse – half of Gen Z, aged 18 - 24 either lost a job or had someone they live with losing theirs or take a pay cut.
Folks in every state have been dealing with financial hardships. Every scenario seemed to play out on the news — single mothers worrying about how to get by without a paycheck, people losing their jobs, and businesses shuttering their doors.
Financial anxiety is at an all-time high in America.
This had a knock-on effect of how people saw their future and their finances. Saving became a priority. This was also helped by the fact there was not much to spend your money on because nothing was open. You couldn’t go out for coffee, you couldn’t have dinner at a restaurant or go to the movies, vacations were forgotten while everyone stayed at home. There was no need to drive long distances, so gas bills dropped.
The result is that Americans over the age of 18 now have 10 percent more saved than the previous year. They have an average of $65,900 in their personal savings compared with $59,737 the year before. The United States Bureau of Economic Analysis said that the savings rate for American households has jumped up to a high of 33.7 percent in April. Before COVID hit the U.S. that rate was at just seven-and-a-half percent. The savings rate is excluding funds specifically earmarked for retirement like a 401(k), IRA, etc.
This boost to savings might stand Americans in great stead down the line. If they can keep the rate of saving this high over a longer time the amount saved for their retirement should be exponentially larger than any generation before them.
Sometimes when bad things happen, good things arise from the ashes. Hopefully, America has a golden dawn ahead that will bring back prosperity.
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