I recently saw a headline that caught my attention: Nearly four-in-ten Americans say they’ll be in survival mode in 2021. To that I would like to say, we need to turn our perspective toward a better normal and not just survival mode.
First, let’s dig into the details of this report. Fidelity Investments 2021 New Year Financial Resolutions Study finds that more than two-thirds of Americans experienced financial setbacks in 2020, which came as a result of losing a job or household income or another emergency expense. Another one-in-five attributed their financial setback to providing unexpected financial assistance to family members or friends.
The study also provided data about the impact COVID-19 has had on families’ financial stability, as nearly 29% of Americans indicate they are in a “worse” financial situation compared to last year, versus only 19% who said the same in 2019 about the year prior.
When faced with financial setbacks in 2020, the most common solutions were to “cut back on other expenses” (45%), “use my emergency savings” (37%), or “take on debt using credit cards or personal loans” (23%). One-in-five “borrowed from friends or family.” Gen-Z (or Screeners as I like to call them) and Millennials were most likely to either borrow from or move in with family members.
Still, the upside of this is many Americans remain optimistic and determined for the New Year, with 72% confident they’ll be in a better financial position in 2021. Younger generations appear to be more committed to actively improving their finances in the new year, with 78% of all Gen Z and Millennial respondents considering a financial resolution compared to 59% of all Gen X and Boomers.
Looking ahead to the New Year, nearly four-in 10 say they’ll spend 2021 in survival mode, meaning they’ll focus on the day-to-day to try to get themselves and their families through the next year. This outlook is more common among older generations (42% and 43% of Gen-X and Boomers, vs. 25% of Gen-Z and 34% of Millennials) and women (42% vs. 34% of men).
To that I say, in the year ahead, we have to be our better selves. We need to innovate to keep things moving forward. In my opinion, 2020 was survival mode and we can’t have 2021 be the same way. We have to look beyond. We have to think about our future and our ecosystems. We must be better innovative forward thinking about sustainability.
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