Chicago, IL, Feb. 25, 2021 — The Financial Health Network, the nation’s authority on financial health, today released new Financial Health Pulse survey data documenting the continued divide between financially vulnerable and financially healthy Americans. The survey, fielded January 11-18, found that 17.5 million people considered financially vulnerable experienced a decline in their financial situation since the pandemic began, with many concerned about their ability to afford basic necessities, including food, healthcare, and housing. This is the first set of survey data in partnership with the Citi Foundation, which is supporting the Financial Health Pulse for the next three years as part of its Action for Racial Equity commitment.
“The data is troubling, showing that millions of Americans are continuing to struggle financially with massive implications for their health and wellbeing,” said Jennifer Tescher, president and CEO of the Financial Health Network. “This current survey highlights the financial cliff facing at-risk households. Without additional stimulus and relief measures, inequality will only continue, especially for lower-income Americans and people of color.”
Half of those considered financially vulnerable have experienced a decline in their financial situation since the pandemic began, compared to just 19% of those considered financially coping and 6% considered financially healthy. Lower-income households have seen the most dramatic declines in their financial situation this last year with those making under $30,000 more than twice as likely to say their financial situation has worsened as households with incomes above $60,000. As the pandemic rages on, individuals are increasingly facing tradeoffs in order to afford basic needs like healthcare. One in ten Americans (10%) said that someone in their household stopped taking a medication or took less than directed because they could not afford it, a near 40% increase since September 2020. Additionally, 13% reported someone in their household forewent necessary healthcare due to cost.
The pandemic continues to have disproportionate effects on Black and Latinx communities, with these respondents more likely to have significant concern around food security and housing. Nearly a quarter of Black (23%) and 22% of Latinx respondents reported worry that their food would run out, compared to only 12% of White and 15% of Asian American respondents. Black and Latinx respondents were more likely to have visited a food bank than their White and Asian American peers. Fear of eviction in the next three months is also more common among Black (16%) and Latinx (12%) respondents than White (6%) and Asian American (8%) respondents.
“The devastating economic consequences of the COVID-19 pandemic have brought to the forefront the fact that many Americans are struggling financially, especially people and communities of color,” said Brandee McHale, head of Citi Community Investing and Development and president of the Citi Foundation. “As recovery efforts continue to take shape, providing reliable, timely and actionable data to inform solutions is imperative. That’s why the Citi Foundation has committed to supporting the Financial Health Pulse over the next three years as part of our work to advance racial equity and help close the racial wealth gap.”
Further survey findings underscore significant financial struggles in households where someone lost a job during the pandemic, with 45% reporting a worse financial situation than a year ago (compared to only 14% of people who did not lose jobs). Among those who reported a job loss, respondents listed several coping strategies, including spending down savings, carrying a balance on their credit cards, and borrowing money.
- 59% reported spending down their savings to make ends meet (compared with 23% of people who did not lose their jobs).
- 55% reported carrying a balance on their credit cards (compared with 33% of people who did not lose their jobs).
- 29% borrowed money from friends and family (compared with 10% of people who did not lose their jobs).
This data signals that further relief efforts and policies are necessary to lift all populations equally. Ample opportunities remain for policymakers, employers and businesses to create solutions that can improve financial health, especially for those struggling the most.
2021 is the fourth year that the Financial Health Network has measured the financial health of people living in the U.S., with the annual Trends Reports showing overall financial health as an economic indicator that tells a more nuanced story compared to other aggregate economic indicators such as market and unemployment numbers. Pulse data utilizes the FinHealth Score® measurement framework. The annual Trends Report is scheduled for fall 2021, with other findings pulling from regular, rigorous, and disaggregated data that shed light on the current state of people’s financial lives scheduled to be released in 2021. Partners interested in working with our team around research opportunities can find more information here.
For additional findings or more information regarding the Financial Health Pulse, please visit finhealthnetwork.org/pulse.
About the Financial Health Network
The Financial Health Network is the leading authority on financial health. We are a trusted resource for business leaders, policymakers and innovators united in a mission to improve the financial health of their customers, employees and communities. Through research, advisory services, measurement tools, and opportunities for cross-sector collaboration, we advance awareness, understanding and proven best practices in support of improved financial health for all. For more on the Financial Health Network, go to www.finhealthnetwork.org and follow us on Twitter at @FinHealthNet.
About the Financial Health Pulse
The Financial Health Pulse is supported by the Citi Foundation. Since the inception of the initiative in 2018, the Financial Health Network has partnered with USC’s Dornsife Center for Economic and Social Research to field the study to their online panel, the Understanding America Study. Study participants who agree to share their transactional and account data use Plaid’s data connectivity services to authorize their data for analysis.