OppLoans 2020 Family Budget Survey
In the first quarter of 2020, Americans watched as a global pandemic swept across the planet, eventually leading the U.S. economy to crumble around them. With so many across the nation – and across the world – falling ill with COVID-19, state governments were faced with the decision to shut down public places, leading many to find themselves out of work.
According to a February 2020 survey from OppLoans – our 2020 Family Budget Survey – more than one-quarter of financial decision-makers said they were not in a good financial place before COVID-19 was declared a pandemic. But with more than 10 million U.S. workers filing in March for their first week of unemployment, what will be the outlook once the dust settles? With restaurants, retail operations, and businesses closing all around us – some temporarily, others for good – the outcome for many Americans is dire.
Now, more than ever, Americans are working with reduced budgets – but those who are struggling don’t have to manage alone.
With this in mind, OppLoans has developed a tool based on data from our 2020 Family Budget Survey and input from industry experts to help consumers manage through this crisis. This resource – The OppLoans Money Guide: A Financial Management Tool – touches on topics ranging from managing finances to coping with income challenges.
In addition to a link to the Money Guide, below is a look at key data points from the OppLoans 2020 Family Budget Survey. While the financial outlook for Americans may be evolving, we can still see how households were managing finances before this global emergency so drastically shifted the state of our economy.
OppLoans 2020 Family Budget Survey: Key Findings
Below is a summary of key findings from the February 2020 survey.
Most respondents say they make financial decisions individually (57%); 40% say they make financial decisions jointly with a partner/spouse.
Budgeters are better savers and more financially stable
Budgeting is widespread (55%) and methods vary in sophistication. Apps are tools that help get the job done. With reduced incomes due to Covid-19, now more than ever, these budgeting tools may help.
Those who do budget tend to save a little more each month (79% of budgeters save something compared to 59% of non-budgeters) and are more active on blogs/websites to learn how to improve their financial situation (56% of budgeters compared to 29% of non-budgeters). Budgeters also feel more financially steady than non-budgeters (61% versus 37%).
For those who do have a budget, they tend to set them on a monthly basis (50%) or to cover a two-week pay period (26%). However, budgeting methods vary across respondents. While some entail manual tracking/posting on the refrigerator, others are more sophisticated.
Even those who are not self-proclaimed budgeters use budgeting apps. Across all respondents, apps are the most popular way to track expenses: 33% use an app from their bank/credit union, while 20% use an app that is unaffiliated with their bank or credit union, such as Mint.
Personal debt is not uncommon
Most survey respondents (81%) feel pretty confident they have enough money to pay for necessities; however, the bare necessities, like rent and utilities, are at times what they also struggle to cover. Making personal debt payments on time plagues 38% of consumers.
Few have a lengthy unemployment cushion
A majority (70%) claim to put away a little something (excluding retirement) each month. However, consumers do not have an unemployment cushion. Financial emergencies are big showstoppers for close to half of U.S. consumers; 16% would not be able to get by if anything happened, and another 38% said they could only make it from 1 to 4 weeks.
Unfortunately, for many, the financial emergency is here. The sharp rise in unemployment and economic uncertainty in Q2 is anticipated to create additional challenges for consumers.
Financial stability is tricky and requires an “active” mentality
Financially unstable survey respondents are less proactive in taking matters into their own hands in terms of sticking to a budget and conducting financial research to improve their situation. Seventy-two percent stick to their budget most of the time versus 93% of those who are in a stable state; only 35% read blogs/go online for financial advice versus 53% of those who are more stable.
Prior to the economic collapse, more than one-quarter (28%) of surveyed U.S. consumers said they were not in a good place financially. Of those who admitted to this, 90% said they felt they were living paycheck to paycheck and just couldn’t seem to get ahead.
For the 50% who said they were in a good place financially, sticking to their budget was a key factor in remaining steady (93% claim to do so most of the time/always). While they may have – or had — a little more income and are – or were – able to save and invest for retirement a bit more, they are also “actively” managing their money via apps from their bank, online budget calculators, and/or separate accounts for saving and spending.
Financial infidelity is “normal”
It’s hard for consumers to be up front about their spending habits all the time. While only 6% feel lying to a spouse/partner about finances is not a real offense, it’s still commonplace for people to bend the truth. A good portion admit to having lied about purchases/outings (54%), general spending habits (50%), and sticking to a budget (46%).
Debt is an area that is especially difficult to be totally forthcoming about – 44% have lied about current debt and 38% have lied about past debt.
Who lies about money? By definition, those who have committed “financial infidelity” have lied three or more times about at least one of the following: purchases/outings, earnings/debt, general spending habits, or sticking to a budget. They carry more personal loan debt than others (47% have at least $15,000 in debt or more), feel they can’t get ahead financially (68%), feel under water on keeping up with monthly bills (53% feel bills are more than their monthly income), and resent their significant other regarding their financial situation (38%). Demographically, they aren’t much different than anyone else.
So who are there “perfect people” out there who never lie? For those who we consider nonliars – those who haven’t committed financial infidelity – it’s a matter of mindset. These people are not more wealthy or stable than anyone else. They do, however, tend to feel that lying/withholding information from a partner is a real offense and never acceptable. They practice what they preach and claim they never even lied one time regarding earnings, spending, honoring their budget, and accruing and being forthcoming with debt.
How OppLoans can help
Using insights from the 2020 Family Budget Survey and top-credentialed experts in the field, the OppLoans Money Guide provides an in-depth toolkit for those struggling with key personal finance concepts. The guide addresses personal and household budgeting challenges, income challenges and resources, and general guidance on paying bills.
Additionally, for readers looking for more specific or in-depth information, the Money Guide links to a series of articles covering a variety of topics, including:
- Ways to alleviate the impact of coronavirus on your wallet
- Budgeting on minimum wage
- Budget strategies for living paycheck to paycheck
- The impact of bad credit on utilities
- Moving forward from financial infidelity
OppLoans 2020 Family Budget Survey: Methodology
In February 2020, OppLoans commissioned an online survey through Pollfish to interview 800 U.S. household financial decision-makers regarding their budgeting practices and attitudes towards managing their finances. Fieldwork was undertaken February 26, 2020. Respondents ranged from age 19 to 64. Each of the four census regions (Northeast, Midwest, South, and West) were equally represented.
Once all survey results were collected, data was weighted to ensure proportional representation of U.S. consumers by age and geography. Margin of error was +/- 3.46% at a 95% confidence level, meaning if the study were repeated, 95 out of 100 times, results would range about 4% in either direction.