NEW YORK — 2020 may be behind us, but many people are still feeling the pain in their wallets. Over half of Americans say they’re experiencing a financial hangover and — with the perfect storm of holiday spending and the COVID-19 pandemic — a new survey finds it will reportedly take them an average of seven weeks to get their finances back on track in 2021.
The recent OnePoll study, commissioned by Credit Sesame, reveals 64 percent of 2,000 Americans regret not handling their money better throughout 2020. The average respondent also picked up five bad financial habits during the pandemic. Millennials picked up seven bad habits and members of Generation Z and Gen X picked up five. The average baby boomer only picked up one bad financial habit last year.
Impulse purchases (51%) come in as the top financial failure among respondents in 2020. Americans also say paying for subscription services they no longer use (44%) and only paying the minimum balance on their credit card bill (35%) also got them into trouble. Another three in 10 respondents add their financial downfall was tied to not sticking to a fixed budget and 15 percent say they’re guilty of not saving regularly.
Credit score crash
A third of respondents shared they didn’t keep an eye on their credit score throughout the pandemic either. In fact, 58 percent regret not being more responsible with their credit during 2020’s financial crisis. On average, the last time respondents checked their credit scores was sometime in August, four months prior to taking the survey in December 2020. A quarter of respondents also believe that checking their credit score can lower it. That’s something which Director of Operations at Credit Sesame Tony Wahl says is a common misconception.
“Checking your credit score on your own does not impact your score at all,” Wahl notes. “It’s important to check our credit score frequently — at least once a month — so that you can stay on top of your situation and correct any errors. Being aware of your credit score is the first step towards improving it,” Wahl explains in a statement.
Stepping towards credit wellness
As respondents plan for the new year, 56 percent are actively trying to improve their credit score. Nearly half of these Americans hope to do so by paying down their credit card balances and 42 percent are avoiding starting new lines of credit. A third of these same respondents will focus on raising their available credit and utilizing credit monitoring services.
“Credit wellness is a crucial stepping stone towards financial freedom,” Wahl adds. “It can be expensive to have poor credit, which often comes with higher interest rates and paying more for goods in the long run. Improving your credit can unlock countless opportunities not just related to loans, but also the kind of home you can live in or car you can buy.”
Respondents say their top financial goal for 2021 is to build up their savings. This just beat out paying down their credit card debt. Another 15 percent are also focusing on buying a car and 10 percent are hoping to buy a new home.