The Financial Impact of the COVID-19 Crisis on Working Families

December 14, 2020

The credit crisis continues to grow - november update

The median credit card balance is now 56% higher than it was at this time a year ago.

December 11, 2020

November Savings update

While 50% of people were able to increase their savings, 50% of people reduced their savings, continuing a savings and withdrawal pattern that has stayed relatively consistent over the past three months.

December 11, 2020

November Withdrawals update

The percentage of people having a significant decrease in their savings balance increased slightly in November, but the gap between 2020 activity and 2019 activity is widening again.

December 10, 2020

It’s getting harder to save

For only the second time since the pandemic started, the percentage of members increasing their balances by $100 dropped below 2019 levels.

December 10, 2020

Grocery Spending continues to rise

December 7, 2020

December Unemployment

73% of SaverLife members continue to report that they are unemployed or have lost hours as a result of the pandemic. What will this mean for their finances as more cities shut down?

November 13, 2020

October Savings Trends - holding strong

The percentage of members who saved in October is very similar to September—52% were able to increase their savings balances.

November 13, 2020

The Credit Crisis Continues

Credit card balances remain elevated from where they were in 2019—balances are 51% higher in October 2020 than they were in 2019.

Both Rhiannon and Jessica relied on credit cards to help keep their families and businesses afloat.

“We were spending more on groceries than normal,” Rhiannon said. “We used credit cards and saved everything we could. We didn’t do any unnecessary spending.”

“My husband’s hours were getting cut,” Jessica said. Her husband works for D.C. Metro and transportation was slowing down. With no idea how long the pandemic would last, and what the economic fallout would be, Jessica decided to hold on to her cash. She used credit cards to keep the business going. As she said, “All I had to leverage was decent credit.”

November 13, 2020

Saving more than $100 by month

While 2020 has been chaotic and unpredictable, with many members finding themselves out of work and caring for family without support, people are—against all odds—continuing to save. In October, for example, we’re seeing very similar numbers of people who are able to save over $100 per month as we did in 2019.

November 13, 2020

Withdrawing more than $100 by month

While we've seen savings over $100 go up and down, we've similarly seen withdrawals over $100 fluctuate this year. This was particularly true in August, the month after heightened unemployment ended. Since then, the 2020 numbers have leveled off to look a lot more like 2019.

This was true for member Carrice, “We had savings and it’s all gone. We’re now living paycheck to paycheck." She and her husband drained the $8,000 they had in savings.

October 27, 2020

SaverLife Member spending has shifted online

Since the pandemic began, spending at Amazon, Target, and Wal-Mart, three of the largest online retailers in the country, has increased tremendously. In fact, the average median monthly spending in April - September was 52% higher than the same period in 2019.

October 23, 2020

A Third of SaverLife Members report higher credit card debt

A third of SaverLife members report increasing credit card balances - in line with the increasing median balances seen in transactional data.

October 23, 2020

The increased spending on groceries isn’t going away

We’ve reported on this statistic a lot over the course of the past few months, and the trend isn’t changing. Members are more responsible for meals in 2020 than they were in 2019 for a variety of reasons, including shelter-in-place and the simple fact that many schools remain remote in distance-only learning mode.

October 23, 2020

Sheltering in place means higher utility bills

While sheltering in place keeps the virus at bay, it also means members are spending more to keep the lights on, their homes cool, and power their devices.

October 23, 2020

Members’ spending on auto-related expenses is normalizing

One category of spending that is returning to 2019 levels is on auto-related expenses. As many people sheltered-in-place during the spring, we weren’t surprised that gas and car maintenance expenses were lower. But given how closely the figures are mirroring each other in the past two months, are we seeing a return to normalcy, as more people return to work, and more and more states start easing regulations?

October 20, 2020

New Report: A $500 Lifeline: Pandemic Cash Grants Help Low-Income Americans Survive a Summer of Uncertainty

Within a month of the COVID-19 pandemic shuttering American life, SaverLife sprang into action to provide critical one-time emergency grants of $500 or $1,000 to almost 5,000 families struggling to make ends meet in the face of overnight income disruption and rising expenses.

A comparison of SaverLife transactional data of cash grant recipients vs. non-recipients clearly demonstrates the effectiveness of these grants in stabilizing family finances during the early months of the pandemic. In addition to providing immediate financial relief, SaverLife found the grants had a stabilizing effect that lasted several months. The results are in: direct relief works.

October 12, 2020

Are we stumbling our way into a new credit crisis?

Underemployment and unemployment are way up. People have to spend more to feed their families. Large savings withdrawals have accelerated. So what other lifeline is there? Taking on consumer credit may be the only remaining answer people have, and the change in credit card balances, when compared to a year ago, seems to support that. As of September, median credit card balances for people in households earning under $50,000 per year are up 38% from the same point in 2019.

“My husband’s hours were getting cut,” Jessica said. Her husband works for D.C. Metro and transportation was slowing down. “Then I started going into the super negatives.”

With no idea how long the pandemic would last, and what the economic fallout would be, Jessica decided to hold on to her cash. She used credit cards to keep the business going. As she said, “All I had to leverage was decent credit.” "

Rhiannon's husband's income went down when he took COVID-19 leave and their bills went up having their whole family at home. (She put $400 of her SaverLife grant toward her credit card bill.)

“We were spending more on groceries than normal,” Rhiannon said. “We used credit cards and saved everything we could. We didn’t do any unnecessary spending.”

October 9, 2020

Withdrawals are Increasing

While many people have been able to save routinely, we also see that the number of people making withdrawals over $100 is higher this year, compared to 2019.

October 9, 2020

SaverLife Member savings crept up in September

The percentage of members who saved in September is up 8% from August to 52%.

This is in line with the recent poll where more members reported being back to a level of employment seen pre-pandemic.

September 25, 2020

September SaverLife Member Un/underemployment Update

The most recent poll represents statistically significant results that more SaverLife members are back to a level of employment seen prior to March.

Adam works as an analyst in the IT department at a healthcare company. “Early in the pandemic, they cut our pay/work hours,” he said. “I was getting about 25% less in wages than what I am used to getting. Though this cut ended in May, I am still making about 10% less from not working as many hours.” His company has not confirmed when or if his pay will go back to his pre-COVID wages. 

Saira has been unemployed since May. Her husband was helping cover the gap in their income by working overtime, but was recently told by his employer that he could only work 40 hours per week. 

Ashley was laid off from her job as a house cleaner in May. She relied on borrowing money from relatives and receiving unemployment benefits to survive. Since expanded federal unemployment expired at the end of July, her situation has become more stressful. “We still owe relatives,” she said. “It’s a little stressful especially with a toddler who constantly needs stuff.” 

Kerry received severance when she was laid off from her job as a health educator and used savings to cover the loss of her income. She’s been unemployed since May and hasn’t had any luck finding a new job. 

September 22, 2020

Is enough being done to protect renters?

We asked 503 people on September 17, 2020 if they’re concerned about their housing security in an attempt to understand if renters are worried about being evicted, and if homeowners with mortgages are concerned about being foreclosure.

The differences in outlook for the two groups is severe, with renters being 158% more likely to say that they are worried about being evicted, versus homeowners who are worried about foreclosure.

September 21, 2020

In a Pandemic, SNAP benefits aren’t enough

We’ve thrown millions of Americans into the COVID-19 ocean, with nothing but a pool float to keep them from drowning. It’s not enough.

September 17, 2020

SaverLife members struggle to feed their families

As the pandemic progresses, and Congress continues it stalemate to provide more help, families are struggling to put food on the table.

September 9, 2020

spending and saving - seven months in to a global pandemic

August 2020 marks the first time in two years that we see an even split in the number of members who were able to save in a given month. Fifty percent of members were able to increase their balances and 50% had to withdraw money. While we’re uncertain of the exact cause, August was the first month that many didn’t receive supplemental unemployment benefits, and it’s also the month that many families returned to “school”, albeit remotely.

As we move in to the seventh month of the pandemic, we start to see the roller coaster of spending finally calm down.

This by no mean indicates that things are easier for SaverLife members - spending on auto is still down 20% compared to the same time last year and grocery spending is up almost 50% compared to August 2019.

September 2, 2020

The Economic Toll of COVID-19 on SaverLife Members

Since the beginning of the pandemic, we have been tracking the financial impact of COVID-19 on our 380,000 members, monitoring the crisis’s effect on savings, debts, income, spending patterns, and more. 

Today, we are releasing a new report that details the experiences of low-income families during the first six months of the pandemic. Our findings are compiled from aggregate data of millions of financial transactions and the results of surveys and polls of our membership.

As a nation, these past six months have been unprecedentedly difficult, and these difficulties have been more pronounced for SaverLife members—families living closer to the poverty line, relying on the social safety net, and now, often unsure of what tomorrow brings and how they will feed their families. The thin safety net they had in early 2020 has been completely eradicated by the pandemic, and the impacts will be long-lasting.

August 20, 2020

Un-and-underemployment numbers among saverLife members rises to 89%, compared with 83% in June.

When we polled our members in June to ask about their employment status, we were surprised to see so many had not only lost their jobs, but also lost hours. We asked again and found that the idea of a rebounding economy was a myth.

In June, 83% of members responded that they had lost hours or jobs - in August, that number rose slightly to 89%.

August 20, 2020

Not enough saverLife Members have been Counted

The census drives funding for communities, including schools, roads, and numerous other public services. Given many SaverLife members live in lower-income communities, it is imperative they be counted. We’re in the process of sharing these results with SaverLife members, as well as resources to understand why the census matters, and links for them to fill out the census. It’s time SaverLife members be heard (and counted).

August 10, 2020

How does saving and spending in New York compare nationally?

After we took a look at the saving and spending patterns nationally last month and in the Bay Area last week, we were curious, how do national saving and spending patterns compare with those in the one-time epicenter of the COVID-19 pandemic, New York City?

August 5, 2020

The Financial Impact of Remote Schooling

As the start of the school year approaches across the country, and most major school districts returning remotely, we wanted to understand what the financial impact would be on our members.

August 4, 2020

How does saving and spending in the bay area compare nationally?

After we took a look at the saving and spending patterns nationally last month, we were curious, how do national saving and spending patterns compare with those in our own backyard, the San Francisco Bay Area.

July 30, 2020

Are you planning to send your children back to school this fall?

Earlier this summer, we asked our members if they were planning to send their children back to school this fall. More than half said yes, while a significant number were undecided.

When we looked at that response and broke it down by people who responded to the same survey responding to the question “Are you working the same or more as you were in March?” vs. “Are you working less or not at all since March?” the responses take on a new meaning:

July 17, 2020

Savings are starting to wane

Through last month, savings trends among SaverLife members were trending higher than normal—likely due to tax refunds and stimulus payments, more people were able to save, and able to do so in greater numbers. That trend has begun to reverse course, and there is very likely a cliff approaching for many members, as the extra $600 in unemployment benefits expire at the end of July.

The chart below shows patterns in both savings and withdrawals, as the sum of each column represents 100% of the linked member population’s net account balance at the end of each month. For example, in February 2020, 60% of members had a net savings gain at the end of the month and 40% had a net savings loss.

July 17, 2020

Rollercoaster Spending in a Pandemic

It’s rare to see categorical changes in spending greater than 10% from the prior month, with occasional exceptions around tax time, where members often receive a large influx of cash from refunds. The swings we see here in spending on groceries, restaurants, and automotive are unprecedented. Other categories not shown here, like loan payments, credit card payments, and utilities, have stayed very consistent so far in 2020.

July 17, 2020

A Tale of two years

While seeing a jump in the number of SaverLife members receiving unemployment benefits isn’t unexpected, the volume of those people is staggering. When we compared the same group of linked members from January 2019 to July 2020, there was a 69% increase in the number of people receiving unemployment, and a 346% increase in the number of people receiving more than $2,000 in unemployment benefits from June 2020 vs. June 2019.

July 14, 2020

No, Everyone isn’t earning more money

The extra $600 a week in unemployment benefits is set to expire at the end of July. While much has been published on Americans earning more income while not working during the pandemic, the reality is not so black and white. SaverLife’s recent poll looked at members’ self-reported income from an employer plus any unemployment benefits in March and compared that with June. The data reveals that about 21% of people are earning more money, but 26% are earning less, and 53% are earning roughly the same amount.

July 14, 2020

Savings May not Last People Much Longer

When SaverLife compared members’ net change in income—from employers and unemployment benefits— between March (when the pandemic began) to June, we found that just over 25% reported a lower income. Digging a little deeper, we looked at their savings’ balances and found that if people need to cover a gap in income with savings, most will deplete their savings within a month, and nearly all of them will deplete their savings in three months.

Of the 20% of people with one month in savings to cover their income shortfall, 9% are receiving unemployment benefits, meaning that when the extra $600 a week ends this month, those savings will be depleted even faster. Of the remaining 80%, whose income is the same or higher than pre-pandemic, 15% are receiving unemployment, meaning they may begin facing a savings cliff once heightened CARES Act unemployment benefits lapse at the end of July.

July 9, 2020

How Satisfied Are You With Your Financial Situation? 

SaverLife asked this question to 500 members—how they felt in March, how they felt in June and how they anticipate feeling about their financial situation in September.

Most members had similar feelings of dissatisfaction in March and June, but people seem optimistic about September. Twenty-six percent of respondents expect to be “very satisfied” come September, a five percent increase over March. We wanted to know more.

When we reached out to find out why members expect their financial situation to improve by September, the responses were hopeful yet show the complexity caused by the pandemic. 

Saver "Natasha" in Texas currently receives unemployment, but knows it will run out soon—yet she is hopeful to have a job in September. Natasha does data entry, and while jobs are scarce, there are some out there. The complicating factor is that she has a 14 year old at home, so she’s only looking for jobs that allow her to work from home, making the search somewhat more difficult. She’s also not sure if she will send her child to school in the fall, if schools are open. 

When we asked what she would tell her Congressperson if given the opportunity, Natasha said that Congress needs to either find a way to provide more jobs for people who are stuck at home, or provide more resources to allow people to stay current with their bills.

~~~

"Alex" is currently unemployed, but when asked if he thinks he’ll still need unemployment benefits come September he says “no” because he is hopeful that by September he is back at his job, driving for Uber. He’s hopeful that the virus will wind down in New York State and he’ll be able to drive regularly. Right now there just aren’t enough passengers.

Alex has one child in elementary school, and while schools were closed, Alex handled childcare duties, including distance learning. He worries about how they’d handle childcare if he goes back to work full-time, but school does not. He thinks that perhaps his wife, who works part-time, might work less and stay home on days when classes are virtual.

Alex thinks that the financial support from the federal government, in terms of stimulus and unemployment benefits, has been incredibly helpful so far. When asked what else the government could do to help him, he said “Nothing, I can take care of myself,” but then quickly added, “they need to do something to help with the pandemic.”

June 23, 2020

SaverLife Members continue to be under- or unemployed

Despite a May jobs report indicating that unemployment is dropping, SaverLife members are not seeing their jobs return.

Similarly to the poll we ran last month, 83% of respondents to a poll we ran yesterday reported they are still underemployed or unemployed.

June 22, 2020

Fewer members are taking out short-term, small-dollar loans: for now

Small dollar loans, such as payday, auto-title, and shorter-term installment loans, are often less widely used after large injections of cash, such as tax refunds. We typically see a consistent number of members using these loans throughout the year.

With so many members receiving stimulus payments (almost 60%), those stimulus payments themselves might be taking the place of the typical short term loan. However, as 84% of members indicated they are either unemployed or underemployed, we expect to see use of small-dollar loan products to accelerate as we move into the summer and government benefits subside.

June 18, 2020

The COVID-19 Economic Crisis Isn’t Going Anywhere, and SaverLife Members Know It

In April, we saw a significant spike in the number of members saving $100 or more. That percentage has dropped significantly in May, but it’s still higher than a year ago. From our perspective, members are preparing for the financial perfect storm coming when unemployment benefits run out and prospects remain weak. A recent poll revealed that 82% of members are unemployed, furloughed, or have had their hours reduced. And members know they still need to pay rent, utilities, and catch up on delayed healthcare and car maintenance expenses.

June 18, 2020

Unemployment Benefits are a Growing Source of Income

A 35% increase in the number of people receiving unemployment benefits is not surprising — in the last 12 weeks, more than 44 million Americans have sought unemployment benefits. 

In many parts of the country, the current federally sponsored levels of unemployment mean that people’s wages are remaining flat or even increasing, however most economists expect that to change dramatically once the federal boosts end in July.

June 1, 2020

What the National Unemployment numbers don’t show

The national unemployment rate of 14.7% has long been used as a barometer of the nation’s financial health, but economists and advocates have long argued that figure obscures the economic struggles of millions of Americans. Is it an imperfect metric to show the real climate of the current financial crisis?

SaverLife wanted to know more, so we asked, “Have you been furloughed or had your hours reduced?” Last week, 4,200 visitors to SaverLife responded to this simple question, and the overwhelming majority indicate that they’re underemployed, at a minimum. It also likely means they’ve suffered a loss of income, compounding an already difficult spring.

June 1, 2020

Credit Card Balances are Up 67% this year

Over the past year, the median credit card balance of SaverLife members has hovered right around $400-$500. Everything changed following the COVID-19 crisis — balances starting climbing, and by the beginning of May, median credit card balances jumped 33% from the beginning of April.

Generally speaking, credit card debt levels are higher in 2020 vs. 2019. This is particularly concerning because the months following tax season usually have the lowest balances seen throughout the year — the median credit card balances as of May 1st 2020 is 20% higher than the median balance on the same date in 2019.

Balances have increased 67% from January 1st to May 1st, 2020. To compare with last year, balances went down 10% in the same timeframe.

SaverLife Member Stimulus Spending By Day Dashboard

The chart below shows how quickly SaverLife members are spending down their stimulus payments. On the left, you can see how much the balance in a member’s account changes starting the day after they receive their payment.

The darkness of the pink shows where we see more activity in member accounts. Almost 40% of savers spend less than $200 on the first day. However, within four days, over a third of SaverLife members who’ve received a stimulus payment have spent a corresponding amount to what they received. Within two weeks, on day 14, over half of SaverLife members have spent their stimulus payments.

May 20, 2020

New Columbia Business School Study: CARES Act Checks are Being Spent Quickly on Essentials

Columbia Business School, utilizing SaverLife data, study finds that households are spending stimulus checks on non-durable goods and basic needs, then saving the rest.

“Given precedence and the amount of the checks, one might have expected larger spending on the likes of automobiles, electronics or appliances that eventually would have a bigger impact on economic recovery. But based on transaction data in our analysis, it’s clear that these checks are sorely needed to help households stay afloat in these very challenging times,” said Professor R.A. Farrokhnia, Executive Director at the Dean’s Office of Advanced Projects and Applied Research in Fintech. “This is in part because it was quite difficult anticipating the depth of COVID-19’s economic damage, especially given the fast pace of the fallout. With so much uncertainty on how long this crisis will last, lower-income households are prioritizing spending down their stimulus payments on buying essentials that can help them right now, as opposed to spending on durable goods, for a number of reasons. And those with higher household liquidity are mostly just keeping the money in the bank, not spending on much thus far.”

May 18, 2020

Members Receiving Stimulus Payments More Likely to Save

SaverLife members who received a stimulus payment were 116% more likely to save $100 in April 2020 vs. in 2019. Do our members know the recovery is likely to be slow? Are they preparing for a long summer? Whatever the answer, they are more likely to have more $100 more money in the bank to help survive this crisis.

SaverLife Member Median Spending Dashboard

How to Use this Dashboard:

This dashboard is updated weekly to show the median spending across select categories. For more detail about any data point, you can hover over the datapoint on a computer, or tap on a mobile device. Filters allow you to sort the data. The thickness of the line indicates how many SaverLife members had spending in that category.

* Note that major dips in the most current month may simply be an indication that we’re only mid-month. Data for the existing month is typically incomplete until 5 business days following the month end.

What We See:

• In April, spending was modestly lower for auto-related expenses, yet far higher in grocery spending, a continuing trend. It also appears healthcare spending in April ticked up, a month later than we typically see it. 

• While it is still too early to make any concrete assumptions about May, it appears a pattern may be emerging that people are making smaller credit card, loan and mortgage  payments.

May 13, 2020

SaverLife Members Saving Rate vs. National Average

SaverLife members tend to save more of their income each month than the typical American, but in March that reversed slightly as the national savings rate jumped in a fashion often only seen at the beginnings of recessions.

SaverLife member savings often spikes in the first quarter of any given year, as members typically save tax refunds to use over the next few months, smoothing inconsistent income and buffer against expense shocks.

May 13, 2020

Why Don't People Expect a Stimulus Payment?

We were shocked to see 15-30% of SaverLife members, depending on the week, say they didn’t expect to receive a stimulus payment. We asked 400 people for more information. This chart summarizes their write-in responses.

• 22% of people said they were “claimed as a dependent”, a valid reason to not receive a stimulus. However, many of those responses included that they were incorrectly claimed as a dependent by a former spouse or a parent.

• 21% of people say they typically don’t file. They are eligible! - they actually just need to go to the non-filer section of the IRS website and they will be able to claim their refund!

• 6% of people said they hadn’t filed 2019 taxes yet. They are eligible! If they filed in 2018, they will receive a stimulus payment.

• 5% of people said it is because they receive SSI or SNAP benefits. They are eligible! These individuals should still be able to receive a stimulus payment. This is a good resource.

• On Tuesday, May 12th, SaverLife sent out an email to members who had not received stimulus checks yet. This email encouraged people who hadn’t provided their direct deposit info to the IRS to do so before the Wednesday deadline. It also directed people who don’t file taxes because they’re below the filing deadline to free tax filing resources and the Non-Filer IRS tool.

May 13, 2020

An Update on our Stimulus Receipt Poll

We continue to survey visitors to SaverLife.org in a poll asking “Have you gotten your stimulus payment yet?”

In week four:

• More people (51% vs 46% last week) have received a direct deposit payment, and fewer people are still expecting them.

• People have started receiving paper checks, and fewer people are waiting for them.

• Despite this good news, about a third of respondents are still expecting to receive a payment, and the number of people who don’t expect to receive a payment has stabilized.

May 6, 2020

Median Grocery Expenses for SNAP Recipients

As we saw last month, there was a sharp increase in grocery spending among all SaverLife members. When we dug a little deeper, we noticed the increase was particularly significant among SaverLife members who receive SNAP benefits. The goal of SNAP payments is to subsidize nutrition for millions of low-income Americans, and the fact that these SaverLife members spent 39% more on groceries in March is troubling.

When we look at checking account withdrawals over the same period, we can see that the decrease in spending directly from checking accounts isn’t as stark as the decrease seen in credit cards. The difference is 23%, which is still significant.

The last week of March 2020, we see a spike in withdrawals, likely due to mortgage and rent payments, at a time when a third of the country was unable to make rent payments due April 1st.

Over the years, SaverLife has learned that a large percentage of our members receive tax refunds in February. We also typically see increases in savings deposits, paying down debt, catching up on utilities, and healthcare spending.

In other words, the 2019 uptick in healthcare spending is typical for every other year we’ve analyzed spending during tax season. This year, however, looks significantly different. The data shows a 15% decrease in members spending money on healthcare compared with 2019. Does this mean Americans are foregoing treatment or delaying paying outstanding medical bills?