Schwab Modern Wealth Survey Reveals Americans’ Changing Priorities around Spending, Saving and Mental Health

As vaccination rates rise and restrictions ease across the country, a majority of Americans feel optimistic about the state of the United States 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.

More than 60 percent of Americans surveyed are optimistic about the U.S. stock market, and more than half feel positive about the U.S. job market, economy and role as a global economic power.

As the country begins to reopen, nearly half (47 percent) of Americans are looking to get back to living and spending like they were before the COVID-19 pandemic, 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).

“While COVID-19 upended nearly every corner of American life, many are starting to see the light at the end of the tunnel and are ready for a reset,” said Charles Schwab senior executive vice president and head of Investor Services Jonathan Craig. “They plan to prioritize experiences and treat themselves after living constrained lives amid restrictions, quarantines and illnesses. But we’re also seeing a healthy balance – even as many people are eager to get out to spend, they also want to nurture newfound, healthy savings and investing habits developed over the last year, and it seems that will be an ongoing marker of this next chapter.”

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.

Recalibrating Priorities and Redefining Wealth

The financial stress the pandemic imposed on Americans is clear. According to Schwab’s survey, 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).

Against this backdrop and as we usher in a new era, more than two-thirds (68 percent) of Americans have reprioritized what matters most to them, with 69 percent saying mental health is more important than it was before, followed closely by relationships (57 percent), financial health (54 percent) and physical health (39 percent).

“The past year has of course caused Americans to focus on their health, in particular their mental health, along with the health of their relationships,” said Charles Schwab vice president of financial planning Rob Williams. “But the pandemic and the significant impact it had on the economy and stock market also taught us a valuable, and in many cases difficult, lesson about the importance of financial health and preparedness, including the importance of having a plan and emergency savings.”

While refocusing their priorities, Americans have also revised their perspectives on what 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. While that’s still more than double the actual average net worth of U.S. households¹, it’s $700,000 below the bar set for wealth in Schwab’s 2020 survey, which was fielded before the pandemic outbreak.

Survey respondents also lowered the bar for what it takes to achieve “financial happiness” and to be “financially comfortable” in 2021:

Planning for the Future

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.

Those with a plan also maintain healthier money habits when it comes to saving and investing:

Despite the benefits of planning, Schwab’s survey shows only a third (33 percent) of Americans have a financial plan in writing. And among those without one, 42 percent say it’s because they don’t think they have enough money to merit a formal plan, 22 percent say it’s too complicated, and 19 percent say they don’t have enough time to develop one.

“For those seeking to shore up their financial futures, investing, financial advice and financial planning have never been more accessible,” said Williams. “At Schwab, we talk about the importance of having a plan at times of significant change or transition in life—like getting married, changing careers or losing a loved one. With the pandemic, we have all collectively experienced a major life event, so it’s particularly important to take the time to create a plan to help ensure your finances are on track and be ready for whatever comes next in your life. We have spent so much of the last year focusing on getting through today, but we’re now seeing an opportunity to look ahead and plan for tomorrow.”

To begin creating a complimentary financial plan, visit www.schwab.com/financial-planning/schwab-plan.

About the Survey

The online survey was conducted by Logica Research from February 1 to February 16, 2021, among a national sample of 1,000 Americans aged 21 to 75. Quotas were set to balance the national sample on key demographic variables. Supporting documentation for any claims or statistical information is available upon request. The margin of error for the national sample is three percentage points. Detailed results can be found here.

About Charles Schwab

At Charles Schwab we believe in the power of investing to help individuals create a better tomorrow. We have a history of challenging the status quo in our industry, innovating in ways that benefit investors and the advisors and employers who serve them, and championing our clients’ goals with passion and integrity.

More information is available at www.aboutschwab.com. Follow us on Twitter, Facebook, YouTube and LinkedIn.

Disclosures

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with 31.9 million active brokerage accounts, 2.1 million corporate retirement plan participants, 1.6 million banking accounts, and approximately $7.07 trillion in client assets as of March 31, 2021. Through its operating subsidiaries, the company provides a full range of wealth management, securities brokerage, banking, asset management, custody, and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiaries, Charles Schwab & Co., Inc., TD Ameritrade, Inc., and TD Ameritrade Clearing, Inc., (members SIPC, www.sipc.org), and their affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent, fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through Schwab Advisor Services. Its primary banking subsidiary, Charles Schwab Bank, SSB (member FDIC and an Equal Housing Lender), provides banking and lending services and products. More information is available at www.aboutschwab.com.

TD Ameritrade, Inc. and TD Ameritrade Clearing, Inc. are separate but affiliated companies and subsidiaries of TD Ameritrade Holding Corporation. TD Ameritrade Holding Corporation is a wholly owned subsidiary of The Charles Schwab Corporation. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank.

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¹ Federal Reserve’s Survey of Consumer Finances released in 2020.

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