Pandemic's Impact on US Savings: A Tale of Two Incomes

While some people saw their financial picture improve during the pandemic, others took a major hit.

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Key points

• The pandemic had a huge impact on Americans' finances.
• While lower earners saw their savings go down, higher earners saw theirs increase.

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It's long been said that well-off Americans and lower earners exist on two different planes. Recent data from national coalition Funding Our Future and payment technology company DailyPay drives home that point.

Among Americans with incomes under $50,000, 36% say they now have less money in their savings than they did before the pandemic. Only 13% of those in that income range saw their savings grow.

By contrast, among Americans with incomes of $100,000 or more, 41% have seen their savings increase since the COVID-19 crisis began. Just 20% of those in this income range saw their savings take a hit.

Americans are worried across the board

The pandemic spurred not just a national health crisis, but an economic one. And now, even though the economy is in much better shape, at least from an unemployment standpoint, many people are still reeling from the effects of the past 22 months.

Not shockingly, 58% of Americans are anxious about their current financial situation. This sentiment was most common among those aged 18 to 34.

Renters were also more likely to worry about their financial circumstances, with 70% expressing concerns. Seeing as how rent prices have soared on a national level, that's not too surprising.

Furthermore, among workers with incomes under $50,000, 67% said they're worried about their financial picture. Given the number of people in this group who saw their savings decline, that's understandable.

Will more aid be on the way to help?

Higher earners may not need much of a financial lifeline at this stage of the pandemic – especially those who never lost their jobs, lost income, or saw their savings balances dip. But lower earners and others in financially precarious situations may still be desperate for a cash infusion.

Unfortunately, at this point, it's unlikely we'll see another round of stimulus checks hit Americans' bank accounts. The national unemployment rate recently reached its lowest level since the start of the pandemic, and that alone makes the chances of a follow-up stimulus round slim.

But that doesn't mean cash-strapped Americans are totally out of luck. If President Biden's Build Back Better proposal is passed, parents will be in line for another year of the boosted Child Tax Credit. Not only will that put extra money in their pockets, but it'll also allow those payments to continue going out as monthly installments.

So far, those monthly payments have helped many families better manage their cash flow. And the boost to the credit has already raised millions of Americans out of poverty. Continuing them could be the lifeline struggling Americans need.

Still, those payments don't help non-parents. Those looking to replenish their savings and shore up their finances may need to take matters into their own hands, whether it's slashing their living costs or taking on second jobs to boost their incomes.

Furthermore, there's an abundance of available jobs these days. Those who are worried about their financial picture could try seeking out better-paying work. With companies being so desperate to hire, there's more room than ever for negotiation.