A recent survey conducted by the National Financial Educators Council (NEFC) shows how concerned Americans are about their personal finances due to the effects of the coronavirus crisis.
According to the survey, which solicited responses from 1,201 people between March 23 and March 27, 58.2% say the crisis has had a negative impact on their personal finances (30.9% called the impact somewhat negative, and 27.3% described it as very negative). About 32% of respondents said the crisis has had neither a positive nor a negative impact, while the remaining 9.9% said the pandemic has had a positive effect on their finances (6.8% indicated the effect was very positive, while 3.1% said somewhat positive).
That's the sentiment right now, but what about the future?
Are you in the majority?
When asked about their concerns about COVID-19 affecting their personal finances over the next three months, the anxiety levels went up. In response to this question, the majority of respondents -- 43% -- said they were very concerned, while 27.8% said somewhat concerned. Combined, 70.8% categorized themselves as concerned about the impact of the disease on their personal finances. Further, 15% said they were neutral -- no concerns one way or the other -- while 6.7% were not very concerned, and 7.5% were not at all worried.
NFEC also asked whether people were more concerned about their health or their finances right now. To that question, 58.8% said their health was their larger concern, while 41.2% said their finances.
This marks a shift from a USA Today/Ipsos poll that came out on March 12. In that survey, 47% said they felt the coronavirus posed a threat to the stock market and the global economy, while only 15% felt it posed a threat to them personally.
Are you prepared?
The new NFEC poll also touched on the level of financial preparedness among Americans. Most feel they are prepared with 17.5% saying they are very prepared, and 29.2% saying they are somewhat prepared. Overall, 46.7% report some level of preparedness. On the other side, 33.2% says they are unprepared, with 12.4% calling themselves somewhat unprepared and 20.8% identifying as very unprepared.
The findings coincide with the start of National Financial Literacy Month on April 1. April was designated as National Financial Literacy Month by Congress in 2004 to raise awareness about the importance of financial education "and the serious consequences that may be associated with a lack of understanding about personal finances."
The survey results will be used to encourage people to prepare financially for future disruptions, like pandemics, that could negatively affect their personal finances, NFEC officials said. According to CEO Vince Shorb:
The NFEC has a mission of helping people work toward financial wellness, and we remain firm in that goal. In these scary and difficult times, achieving such financial security becomes critical. We'll emerge from this crisis with an even greater passion and need to help people improve their personal financial situations. The data show that we all are affected by the coronavirus outbreak, but we can get through this crisis by working together.
Being better prepared financially could mean improving your financial literacy or becoming familiar with the various concepts, ideas, and strategies related to personal finance. It could also mean having an emergency fund or an adequate amount of money in savings for unexpected and unforeseen circumstances, like a pandemic. Further, it could mean having manageable debt and expenses, and not living beyond your means. Also, being prepared means having a financial plan for future expenses, like college and retirement, and making sure you have the right risk/reward profile for your goals.