The COVID-19 pandemic has significantly impacted Americans’ financial wellness and financial habits, with one in three saying their household finances have been negatively affected and 42 percent feeling as though they need to manage their finances more closely. Despite this, Americans spend four times as much time on social media sites than on their financial well-being, according to a new TIAA Digital Engagement survey.
Social media also influences how Americans make financial decisions. While financial services providers’ online tools are the most trusted resource for information (63 percent), one in five say social media content is also a go-to resource. One-third say they trust social media content to help them make financial decisions, and 32 percent say they trust social media influencers and celebrities’ financial advice.
“In today’s attention economy, many people are turning to tools and resources beyond their providers for information on how to manage their finances,” said John Elton, Senior Vice President and Chief Information Officer for TIAA Bank. “Financial services firms are in a unique position and need to offer high-tech and high-touch tools across platforms to meet all generations where they are – whether it’s online or in-person – to ensure we’re helping them recover financially from the pandemic.”
Millennials and Gen Z, not Boomers, are changing how they manage their finances.
The survey also found significant generational differences when it comes to managing finances.
- A majority of those under the age of 65 say they have changed how they manage their finances. Seventy-one percent of those under 65 have changed how they manage their finances, compared to just half of those over 65. This includes using a credit card more often to make purchases (27 percent), downloading a new app to help manage finances (12 percent), or setting up a virtual call with a financial advisor (9 percent).
- Of any age group, Millennials – and especially men – are spending the most time managing their finances. Although half of Americans spend less than one hour a week on their finances, 39 percent of Millennials say they spend four or more hours a week managing their finances, compared to just 25 percent of Gen Z respondents and only seven percent of Baby Boomers. Men are nearly twice as likely as women to spend four hours or more a week on their personal finances (30 percent vs. 16 percent).
- Younger generations are more apt to get financial wellness checkups. Although 74 percent of Americans visit a primary care provider for a checkup at least once a year – and nearly half have used telehealth services in the last year – two-thirds have never had a financial checkup with a provider. More than half of respondents under 65 say they are interested in a financial wellness checkup, compared to just 30 percent of those over 65. The most preferred method of meeting for a financial wellness checkup is in person (26 percent).
Back to basics? Financial technology, video calls may not increase in popularity post-pandemic.
Americans are utilizing more technology like video calls and contactless payments in their daily lives today. Still, they’re split on if this will impact their finances in a post-pandemic environment.
- Americans are open to using new devices to manage their finances. Respondents say home voice assistants (42 percent), smartwatches (43 percent), or a chatbot on a financial provider’s website (44 percent) are tools they feel comfortable using to manage their finances. One-third of respondents say they already use digital tools from their financial provider to track financial information across accounts.
- But many still prefer to use desktop computers (39 percent) to manage their finances, including their bank account balances and retirement plans, despite their openness and comfortability with utilizing new technologies.
- About half of respondents say they are open to, or already have, opened accounts without speaking to a person first. This includes checking accounts (36 percent), retirement savings accounts (19 percent), or brokerage accounts (9 percent).
- For those who work with a financial advisor, half prefer to continue interacting over the phone to utilizing video calls (25 percent). One in five respondents also say they don’t anticipate connecting with their financial provider as often via mobile app or over the phone following the end of the pandemic unless they need to address an account or investment concern.
To see the full survey results, visit https://www.tiaa.org/public/pdf/digital_engagement_survey.pdf.
With an award-winning 1 track record for consistent investment performance, TIAA (TIAA.org) is the leading provider of financial services in the academic, research, medical, cultural and government fields. TIAA has $1.3 trillion in assets under management (as of 06/30/2021 2) and offers a wide range of financial solutions, including investing, banking, advice and education, and retirement services.