Financial well-being isn't something that takes place overnight — it takes continuous time and effort to improve. But in the wake of the coronavirus crisis and the resulting recession, Americans are seeing the benefits of financial wellness and taking strides to improve their own situation.
In TIAA's new Digital Engagement survey, the financial services provider revealed that about a third of Americans have had their household finances impacted by the COVID-19 pandemic. A greater amount, 42%, now feel that they need to manage their finances more closely as a result.
However, these sentiments don't exactly line up with their actions: The report also indicated that half of respondents spend more than four hours a week on social media — but less than one hour on their finances.
Consumers are using technology to increase their financial acumen amid pandemic
A closer look at TIAA's findings suggest that this time spent on social media may not be wasted, however. Although the online tools provided by financial service providers remain the most trusted resource for financial information (63%), 1 in 5 respondents also turn to social media content to learn about personal finance.
The TIAA survey also found that:
- 33% trust social media content to help them make financial decisions
- 32% trust social media influencers and celebrities for financial advice
- 11% most often rely on social media content for financial information
These platforms are helping young people learn about finances at an earlier age, as a different survey from Wells Fargo & Company showed that more than a third of teenagers are also getting their personal finance knowledge from social media.
Technology is also making financial wellness more accessible to consumers, as respondents are now using their financial provider's digital tools (33%) and website chatbots (44%) to manage their financial information. Others are bringing their own devices into the mix, including:
- Smartwatches (43%)
- Home voice assistants (42%)
Still, TIAA points out that these financial technologies may be phased out by consumers after the pandemic.
Some still use their laptop or desktop computers to keep track of their finances, including their bank account balances (39%) and retirement plans (30%). And of those who said they work with a financial advisor, half of them want to talk over the phone compared to 25% of those who prefer video calls.
Young adults are more likely to take initiative in improving their financial situation
A recent Coinstar survey discovered that a majority of Americans have improved their saving and spending habits during the COVID-19 pandemic. Similarly, TIAA found that respondents continue to change their financial habits with tactics like:
- Using a debit or credit card to make purchases more often (27%)
- Using an automated bill-pay system (17%)
- Using contactless payments via their smartphone (16%)
- Paying their bills using features from their bank’s or credit union’s website (16%)
More young adults are making this change too — 71% of respondents under the age of 65 reported changes in their financial habits, versus half of respondents over 65. Younger respondents are also setting aside more time to look over their finances compared to their older counterparts.
The TIAA report revealed that those spending four or more hours on their personal finances included:
- 39% of millennials
- 30% of Gen Z
- 25% of Gen X
- 7% of baby boomers
Methodology: Between Feb. 1-9, 2021, KRC Research conducted an online survey of 1,000 adults (ages 18 and older) on behalf of TIAA.