As restrictions ease across the US, a majority of Americans feel optimistic about the state of the country overall, including the economy, the stock market and their personal financial prospects, according to Schwab’s 2021 Modern Wealth Survey, an annual examination of how 1,000 Americans think about saving, spending, investing and wealth.
Although more than half were financially impacted over the past year -whether the economic environment strained their finances (31 percent), they faced a salary cut or reduced hours (26 percent), or they were laid off or furloughed (20 percent)- nearly half (47 percent) of Americans are looking to get back to living and spending like they were before the pandemic hit the country and almost a quarter (24 percent) say they are eager to indulge even more to make up for lost time.
Americans are dreaming most about traveling (40 percent) and socializing (30 percent), with many planning to splurge on a vacation (24 percent), dine out at a fancy restaurant (21 percent) or host a party (15 percent).
Looking forward, more than two-thirds (68 percent) of Americans say they have reprioritized what matters to them. Sixty-nine percent of those say mental health is more important than it was before, followed by relationships (57%), financial health (54%) and physical health (39%).
While refocusing their priorities, Americans have also have also tamped down what they think it takes to be wealthy. Schwab’s survey reveals Americans believe it takes an average $1.9 million in personal net worth to be considered “wealthy” in 2021. Last year, they said it would take a net worth of $2.6 million to be considered wealthy. Survey respondents also lowered the bar for what it takes to achieve “financial happiness” and to be “financially comfortable” in 2021.
In 2020, Americans said it would take an average net worth of $1.75 million to be financially happy. This year, it is just $1.1 million. They also lowered the amount they said it would take to be financially comfortable from an average net worth of $934,000 in 2020 to $624,000 this year.
Furthermore, nearly two-thirds (64 percent) of Americans surveyed say they were savers in 2020, as opposed to spenders. Hoping to double down on new savings habits in post-COVID life, 80 percent plan to be bigger savers than spenders in the year ahead, with nearly half (45 percent) planning to save more money and a third (34 percent) intending to reduce their debt once the pandemic has subsided.
In addition to balancing spending and saving, Americans are also taking a measured approach when it comes to their investments: 48 percent say they’re investing to increase savings in case of an emergency and 63 percent of investors consider emotional and financial risk tolerance when investing.
As Americans look beyond the pandemic and begin to think about their futures, Schwab’s survey shows that 54 percent of Americans who have a written financial plan feel “very confident” about reaching their financial goals, while only 18 percent of those without a plan feel the same level of certainty.
