It’s widely understood that how we feel can have a big influence on the actions we take – especially when it comes to money. New data from New York Life details how individuals’ emotions are evolving throughout the pandemic and how this relates to their financial confidence and behavior.

“COVID-19 is undoubtedly impacting the way Americans are feeling and these sentiments are informing the way we make financial decisions,” said Aaron Ball, SVP and Head of Insurance Solutions, New York Life. “One thing that has remained consistent throughout this unprecedented experience is our desire to protect ourselves and those we love – both physically and financially. This sentiment is not only evident within the data but has been echoed in the conversations our agents are having with clients across the country as they discuss the importance of periodically revisiting their financial strategies.”

The New York Life survey measured sentiments of a national sample of 2,200 adults and asked the same set of questions on March 23 and 24, and again April 9 and 10.

Americans are Feeling Worried – and Loved

According to initial findings in late March, the strongest emotion adults across America have been experiencing is worry, but that’s quickly followed by a feeling of being loved. While 54% of respondents feel scared, 51% are hopeful – and feelings of sadness (56%) are balanced out by a sense of connectedness (49%). Fifty-eight percent of respondents also say they’ve been feeling strongly reflective.



financial survey graph

Source: New York Life. Research conducted 23-24 March 2020

The more positive people are, the more confident they feel about their future finances…

The New York Life survey shows that positive emotion is linked to financial confidence. For example, 56% of people who said in late April they feel hopeful are also confident that their retirement savings can last for the rest of their life. Conversely, 44% of respondents who are currently feeling negative emotions (restless, worried, angry, sad, or scared) are confident that they have enough in their retirement savings. Those who feel well-prepared financially are likely to feel more positive than those who aren’t – suggesting that addressing retirement planning could help dissipate some negative feelings.

But everyone is less confident about their savings than they were a month ago

While many people are confident about their long-term financial arrangements, respondents across the board feel their savings have taken a hit from the pandemic. Those who identify as hopeful in late April are 10% more likely to report less confidence than more confidence in their savings compared to the prior month. Among those identifying as scared in late April, 32% are more likely to report less confidence versus more confidence in their savings.

The survey also found regional differences in financial confidence. From late March to early April, respondents in the Northeast and the South recorded substantial declines in financial confidence – whereas confidence improved in the Midwest and West, potentially correlating to the impact of the virus in various parts of the country.

Americans know they should update their financial plans but find it difficult to take action

When asked in late March whether their financial plan prepared them for the current environment, 78% of respondents felt their financial plan did not prepare them for unprecedented market volatility or now needs to be adjusted (that number dropped to 71% in early April). But only about half (52% in late March and 51% in early April) say they are more likely to re-evaluate their current plan or create a new one. About one-quarter of respondents in both waves of the survey say recent events have made them more likely to seek out expert advice to help revise their plan.

“While the data suggests individuals understand that updating their financial plans is important – in any environment, but especially now – there is reticence to take action,” said Ball. “Despite being in a virtual environment, human guidance remains a critically important piece of ensuring financial plans can weather any situation. Connecting with a qualified financial advisor can help ensure Americans have enough protection for today and tomorrow.” 

Value of professional financial guidance spans emotions, generations

When asked in early April, those feeling angry were the most likely to seek assistance from a financial professional, with those feeling sad, scared and reflective following close behind. When asked about their likelihood to seek assistance from a financial professional when updating their financial plan in late March, respondents feeling hopeful were 8% more likely to seek help than not seek help.

Younger Millennials (age 24-31) were the most likely to express a likelihood to seek assistance from a financial professional to update their financial plan, while Boomers were the least likely. Two-in-five older Millennials (age 32-39) remain likely to seek assistance from a financial professional, as well as 40% of Generation Z, suggesting an appetite for guidance among younger populations.

Thinking of how the coronavirus may have affected your financial plans, are you more or less likely to seek assistance from a financial professional when updating your plan?    

 

 

          Much More and Somewhat More Likely    
Demographic

March 23-24

April 9-10

Change

Generation Z: Age 18-23

40%

31%

-9%

Young Millennials: Age 24-31

34%

39%

5%

Millennial: Age 24-39    

36%

36%

0%

Old Millennials: Age 32-39    

37%

33%

-4%

Generation X: Age 40-55    

27%

27%

0%

Boomers: Age 56-74    

14%

19%

5%

 

“Financial planning is an inherently emotional process, as it requires us to think about how we can protect the people we love and set them up for success. As a result, it can be easy for our feelings to get the best of us when we’re confronting a crisis – but a professional can help us navigate those feelings to ensure we’re making the best choices for our families,” said Ball.

About the Surveys

The surveys were conducted among a national sample of 2,200 adults. The surveys, fielded first March 23-24, 2020, and again April 9-10, 2020, were conducted online and the data were weighted to approximate a target sample of adults based on age, educational attainment, gender, race, and region. Results from the full survey have a margin of error of plus or minus 2 percentage points.
 

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Media contact
Sara Sefcovic
New York Life Insurance Company
(212) 576-4499
Sara_M_Sefcovic@newyorklife.com

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