Consolidated Credit asked more than 1,000 Americans about their finances this year – and found that clients are doing much better during the pandemic.
Credit card debt, rent payments, and job losses have hit Americans hard during this pandemic. But the right tools can help them overcome those obstacles.
Consolidated Credit surveyed both clients and non-clients about their finances over the holiday season. The survey found that clients were almost twice as likely (57%) than non-clients (31%) to report their finances were better compared to this time in 2019.
What’s the reason for the difference? It’s not what they’ve earned. Around the same number of clients (17%) and average Americans (16%) have less income this year. It’s what they’ve learned from Consolidated Credit, says president Gary Herman.
“Knowing what to do with your money is just as important as how much money you have,” Herman said. “Advice from our certified credit counselors is valuable as is, but even more so right now.”
On top of the same amount of lost income, clients (20%) and non-clients (17%) also said their credit card debt is worse now than it was last year. However, clients are much more optimistic about improving their finances soon. Sixty-three percent of clients said their financial situation will improve in the coming months, while 50% of non-clients said the same.
That optimism is a direct result of developing healthy financial habits, Herman said.
“When you map out your spending, build a solid amount of savings and stick to a budget, it’s much easier to know what your finances are going to look like a month from now,” he said. “Thousands of Americans entered the pandemic without any sort of plan or budget in place, and their habits are digging them deeper into a hole.”
Those good habits are obvious in some of the survey’s other findings…
- Fewer clients (7%) had problems paying rent or mortgage than non-clients (10%).
- More than twice the amount of non-clients (8%) said they would spend between $1,000 and $2,000 than clients (4%) for the holidays.
- More non-clients (76%) owe $2,500 or more than clients (60%).
Herman says Consolidated Credit doesn’t just teach people how to get out of debt, it teaches them how to stay out of debt.
“Of course it’s possible to learn good financial practices on your own, but it’s a lot easier when you have a certified counselor in your corner to keep you accountable,” he said. “If you’re making less money because of the pandemic and keeping the same bad spending habits, then it’s probably time to ask for help.”