When the pandemic forced many Americans to readjust how they live and where they work, some took the opportunity to get proactive about their financial futures.
Around a third, or 32%, of Americans, say they became more disciplined with their money, according to Northwestern Mutual’s recent 2021 Planning & Progress survey, and 95% expect to keep it that way.
The annual survey, conducted by The Harris Poll on behalf of Northwestern Mutual, includes responses from over 2,300 adults during a 10-day period in March 2021. The survey found that nearly 1 in 5 U.S. adults did not have a financial plan before the pandemic struck. But 83% of Americans say they either created, revisited or adjusted their financial plan during the pandemic.
The most common habit survey respondents developed is reducing their living costs and spending, with 45% of respondents saying they adopted this habit.
The second most common habit, which 34% of survey respondents say they adopted, is prioritizing paying down debt. In 2020, Americans paid off a record $82.1 billion in credit card debt, and during the first quarter of 2021, they’ve paid off another $56.5 billion in credit card debt, according to personal finance website WalletHub.
Many Americans also started investing more, with 33% adopting the habit during the pandemic.
But paying down debt and investing are not the only adjustments Americans are planning to make.The survey found that 25% are considering increasing their savings and retirement contributions.
Of course, there were still many downsides. Nearly half of Americans, 45%, say the pandemic has impacted their timeline to reach financial security by one to two years, while 35% delayed making any large financial or life decisions.
While improvements in financial habits are positive, it should not overshadow the fact that adjustments are coming from a place of financial difficulties for many, Christian Mitchell, executive vice president and chief customer officer at Northwestern Mutual, said in a statement.
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