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PEOPLE DON’T KNOW WHAT TO DO WITH THEIR MONEY ANYMORE
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1. Culture & Criticism
PEOPLE DON’T KNOW WHAT TO DO WITH THEIR MONEY ANYMORE
“I'm genuinely not sure if I should be saving for retirement or if we're all
gonna burn out before then.”
By Shannon Keating
Shannon Keating Senior Culture Writer & Editor
Posted on March 1, 2022, at 10:53 a.m. ET
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“I just want to eat and be able to exist,” Amanda Wong, a 32-year-old artist
living in California, recently told BuzzFeed News. “But it seems like it costs
money just to breathe in the US.” She said she worries “way more” about money
now than she did at the start of the pandemic.
Saving “doesn’t help anymore,” she said — the expenses just keep coming. “I’m
afraid our income will run out, or else just not be enough for the rising costs
of everything, and we’ll end up being homeless.”
Chelsea Green, a 30-year-old technical accounting consultant in New Jersey, has
had virtually the opposite experience. Since the start of the pandemic, she’s
worried “a LOT less” about money, she said, which she knows puts her “in a rare
and privileged position.” Two years ago, she had close to $80,000 in credit card
debt and student loans. When the federal freeze on student loan payments and
interest rates was announced, Green kept paying her balance down. “Now I'm 100%
debt-free, and it's been a huge weight off my shoulders.”
ADVERTISEMENT
“Different groups of Americans have had vastly different experiences of the
pandemic when it comes to how it’s impacted them financially,” Kimberly Palmer,
a personal finance expert, told BuzzFeed News in a recent interview. Palmer
writes and reports for NerdWallet, which just released a study on American
household debt, analyzing government data pulled from sources like the US Census
Bureau and the Federal Reserve. The study found that 35% of Americans say their
financial situation has worsened over the past year; 21% of that group cited job
loss as the major factor. Meanwhile, a quarter of Americans say their finances
have actually improved during this period, while a full 40% have seen their
finances remain about the same.
“The biggest factor in whether you feel like you’re doing well or not so well
right now is how the pandemic impacted your income,” Palmer said. “If you could
hold onto your job, those are the people doing relatively well — in some cases,
they’re even doing better.”
The pandemic has both exposed and exacerbated long-existing inequalities here in
the US and around the world. The poorer you are, the more likely it is you’ve
faced one or more of COVID’s most devastating impacts, whether loss of income,
long-term illness, or death. (Meanwhile, the richer you are, the more likely
you’ve reaped its spoils.) The 35% of people living in the US whose financial
situation has worsened throughout the pandemic are barely scraping by.
Approximately 3.7 million children have been plunged into poverty following the
expiration of expanded child tax credit payments at the end of 2021. Eviction
moratoriums throughout the country are expiring as well, and no federal stimulus
checks are forthcoming. Benefits that allowed wealthier Americans to build their
nest eggs were essential for others’ everyday survival, and without them, the
future looks absolutely terrifying.
But even those who are in a relatively good place with saving and spending right
now are worried about their financial future.
> “I'm genuinely not sure if I should be saving for retirement or if we're all
> gonna burn out before then and I should just say fuck it???”
Over the past couple of years, according to the NerdWallet study, the median
household income has fallen 3%, while the overall cost of living is up 7% — “a
sharp reversal of a decade-long trend in which income growth has exceeded
inflation.”
“Across the board, there’s stressful factors and strains,” said Palmer, who
noted the volatile housing market (49% of Americans say the availability of
affordable housing in their local community is a major problem, up 10 points
from 2018, according to a recent Pew Research Center survey), as well as rising
rates of inflation and interest rates affecting the cost of everyday expenses
like food and gas. The Russian invasion of Ukraine will likely make gas and
other essential goods still more expensive, while also sending the world economy
into even greater turmoil.
Lisa Liu, a 26-year-old accountant and Californian making a low six-figure
salary, who has about $100,000 in savings, said they're worried more about money
now than they were two years ago. “Inflation just seems to keep going up,” they
said, “and even with saving A LOT more now than before [the pandemic], every big
future purchase (ex: car, house) seems to keep getting more expensive and out of
reach.”
“We have more money than ever, but my stress around money has remained the
same,” said Laura Denny, a 36-year-told Ohioan who works as a senior manager in
communications. She and her husband both switched companies recently with the
goal of higher pay, which they managed to do quickly thanks to what she calls
the “WFH movement,” adding, “these gains would have taken much longer in the
before times.”
Denny’s fears were somewhat alleviated by stimulus checks, “which did do a lot
to boost our savings and offer some level of comfort.” Still, she worries about
saving enough for retirement and “whatever the future holds.”
We’re told that once upon a time in America, one could reasonably expect to work
hard and build a good and decent life, with a house of one’s own, a stable job,
and the promise of a comfortable retirement. But that dream grows less and less
achievable for even relatively privileged, middle-class Americans as income
inequality widens and we all face a frighteningly uncertain future. Russia has
invaded Ukraine, which President Biden said would “change the world” forever
afterward. The pandemic is seemingly quieting down, offering us the illusion of
a return to normalcy, but there’s always the possibility of another variant
springing forth to wreak still more havoc on our lives, disrupt our best-laid
plans. Apocalyptic storms and fires, fueled by ever-worsening climate change,
have some millennials and Gen Z’ers wondering if it’s even worth saving for
retirement. Forty-one percent of Americans think it would take a miracle to be
able to retire at all.
Palmer, the NerdWallet financial expert, said that she’s anecdotally noticed two
different mindsets emerging from Americans currently grappling with financial
uncertainty, which she chalks up in part to “personality differences.” There are
those who “don’t want to wait to take a life-changing vacation — they want to
take it now,” she said. “We could face greater challenges later. There’s this
sense that you don’t know what’s going to happen, and you don’t want to wait for
something that’s important to you.”
Those are people like Kelsey Berteaux, 30, who lives in Utah and works as a
paralegal, and who hasn’t been tracking her spending since she got divorced
right before the pandemic. She’s worried she could be overspending, “but I’m
also unwilling to change, lol,” she said. Now that the world is opening up
again, she’s realized what she truly values. “I'm planning a cruise where I'll
pay to take all my immediate family,” she said. “That will wipe out basically
all my cash savings, but making the memories seems more worth it to me than
having a number on a screen.”
At the same time, Palmer said, there are those who came of age during the
financial crisis of 2008, who are now “persuaded to buckle down and live more
frugally,” in preparation for whatever global disaster will hit us all next.
Katherine Knight, a 26-year-old accountant in Tennessee, said she “craves
security and stability.” The pandemic has encouraged her to plan to buy a house
to avoid the crush of rapid rent increases in her city. All of this uncertainty,
she said, “makes me want some land to garden to grow food. I just want to know I
can take care of myself and my family.”
And then there are those who are so deeply underwater they can’t do much of
either saving or spending, merely surviving day to day.
“I have been worried about money since I was old enough to understand what it
was,” said Amy Grant, a 33-year-old administrative assistant who lives in
Wisconsin. Grant grew up poor, “so living paycheck to paycheck has been my
reality for most of my life,” she said. When Grant’s husband was injured at
work, they were able to use worker’s compensation as a down payment on a home,
but she’s scared of his injuries returning; at only 35, he’s already had two
major surgeries. She’d like to be able to go to the dentist this year, but isn’t
sure they can afford it without insurance.
What unites people throughout these different demographics and personality
types, however, is a mounting sense of uneasiness, or even dread.
“As a millennial I always have financial fears,” Denny said. “I feel quite
traumatized by the two major recessions that have affected me as an adult, and
the housing market and job markets have made things feel unstable.
“As a household we make $160K, which sounds like a TON of money to me —
sometimes it’s hard to reconcile how high our income is and how I think about
money,” she continued. “Our spending and attitude toward money is about the same
as it was when we made $80K — we are always being strategic about getting the
best deal or how we can save money. We did spend a few years living well below
our means to pay off all of our credit card and medical debt. This was something
I thought we would never do, and something we are extremely proud of.
This did help my anxiety around money, but I still consistently feel like we are
not saving enough, or are not being frugal enough.”
Aly Wise, a 24-year-old living in Utah and an academic interventionist who works
with students who need extra academic or behavioral support, said she worries
“much more” about money now. Her wife was diagnosed with multiple sclerosis in
January, right after having to pick up a second job. “She’s been working 70 hour
weeks, 7 days a week, for 15 months now and we’re barely making rent,” Wise
said. “We used to want to save for a nice Subaru or a townhome. Now it’s
just…praying to stay afloat. And using money for things we really want to — we
call them ‘quality of life improvements.’ A nice carpet cleaner, a self-cleaning
litter box. Anything to make day to day life tolerable now.” Her biggest
financial fear, short term, is being evicted — “we’re so close to missing rent
every month,” she said. Long term, she is “terrified” her wife will “work
herself into the ground.”
Andrea LaRue, a 36-year-old director of sales at a hotel in Michigan, has two
children who both required hospital visits over the past year, costing her
almost $10,000. “We are just unable to make it week to week,” she said. “We
overdraft our checking most weeks, and we can't seem to get our head above
water. We have nothing left in savings and have maxed out three credit cards. …
Anything other than keeping our heads above water doesn't seem attainable at
this point.”
Paul Lawbaugh, a 47-year-old, self-employed Oregonian, has suffered lost wages
over the course of the pandemic, all while caring for three children and an
older parent living with dementia. “We used to have a retirement account but
we've been cashing it out during the pandemic,” he said. “It's disheartening
because not only aren't there any breaks for people caring for elderly parents —
not even tax breaks, which surprises people — we're regularly worse off.
Example, we didn't even get the stimulus for my parent, because he is over 17,
and since he is a dependent he also couldn't get the stimulus himself. Only
retired people that file their own taxes and aren't considered a dependent were
eligible. Hell, even nursing homes got stimulus dollars, but for caring families
it's a slap in the face instead.”
Lawbaugh, like many others who spoke to BuzzFeed News for this story, fears
losing his home. “It's not just young folks that can't afford to buy a house due
to debt,” he said. “Lots of people are sliding right now. That's part of the
great resignation. For people that see their wages are only sinking them in the
long term, it's better to regroup and find something else entirely than slowly
grind ourselves into debt.”
“Every normal bill we pay has gone up, from rent to electricity to basic
groceries,” said Elizabeth LePage, 33, a photographer who lives in Oregon.
“Money is tighter than ever and salaries are not going up. Plus, my partner had
to leave his job for serious health reasons, so we’re out a whole paycheck.” The
couple had been hoping to have a child, but they’ve decided to wait until they
feel more financially secure. “Currently, that looks about three to eight years
off, and may end up not being possible with my age.” LePage used to feel more
positive about the future; now, she worries “that our debt will last well into
our 80s and potentially be passed on to loved ones when we die.”
Trina Patel, a financial expert at Albert, an automated financial services
company, told BuzzFeed News in a recent interview that, prepandemic, she and her
colleagues saw their users prioritizing things like weddings or a house, whereas
an emergency fund is now more top of mind. “Before, it didn’t feel like as much
of a priority,” she said. Now, more people “see that as such a necessity: ‘What
do I need to do, what spending am I willing to reduce?’”
But Patel acknowledged there’s only so much you can really cut out of your
spending when you’re living paycheck to paycheck. The biggest hurdle when it
comes to encouraging people with less means to save more of what they don’t
really have is that building up enough to actually feel safe “still doesn’t
really feel attainable,” she said.
Many people have found themselves in a sort of existential limbo, not fully in
either the responsible saving or reckless spending camp, but somewhere in
between.
Caroline Davis, a 28-year-old production coordinator in Maryland, said they’re
“more concerned about having a substantial savings account for emergencies” than
they were before the pandemic, but at the same time, “I'm genuinely not sure if
I should be saving for retirement or if we're all gonna burn out before then and
I should just say fuck it???”
A 33-year-old attorney in Alabama who asked to be identified by her middle name,
Alexandra, said that the pandemic has transformed her relationship with money.
“I knew ever since the Great Recession that the economy was fickle and jobs were
never guaranteed,” she said. “I wanted to do whatever I could to make sure I was
secure financially should something unforeseen happen again. Working in estate,
guardianship, and conservatorship law also opened my eyes to the bleak future
most of us will have to endure during our final years, which can only be abated
with wealth. I dove face-first into the grind because of these fears so that I
could secure a better future for myself.”
> "The future feels much less certain — which makes it easy to justify
> spending!”
“Prepandemic I was much more focused on experiences: travel, supporting my
sister's wedding, socializing with friends, participating in their life
milestones, etc.,” said Harrison Holcomb, a 32-year-old fundraiser for a
nonprofit living in Colorado. “Since the pandemic, I am much more focused on
building financial security and independence as well as creating an approach to
money that is less solely dependent on one job or income stream.” He’d like to
buy a house or a condo eventually, but “the very tight, expensive real estate
market, increased cost of living, and my student debt makes it feel
frustratingly just out of reach.”
Katherine, a 31-year-old graduate student who asked that her last name be
withheld, said that the pandemic has simultaneously made her "more worried, but
also more flippant about money." She pulled 6k out of savings to live in Mexico;
she ate takeout every day for months. "Not only are we in a pandemic, but the
past two years have been full of awareness of the reality of climate change and
the possibility of revolution," she said. "In all, the future feels much less
certain-which makes it easy to justify spending!"
Alexandra, for all her aggressive saving — she has about $100,000 saved now
between brokerage accounts and liquid assets and hopes to have $2 million put
away by the time she retires — has also come to a place in her life where she
knows “what I will accept, and what I won’t, in the journey towards financial
security.” She’s glad she was able to build up her emergency and retirement
savings, but was dismayed to find that she “was often exploited by employers”
and it was “noticeably wrecking my mental and physical health.”
“At some point, sacrificing your current health so that you have access to all
the resources you need in retirement becomes counterintuitive,” she said. “If I
continued on the path I was on prior to the pandemic, I likely would have needed
assisted care much sooner and with more health issues than I would had I taken
care of myself. Besides, the very purpose of working is to give you the means to
take care of yourself, but jobs that actively degrade your mental and physical
well-being not only fail to serve but also undermine that purpose.”
Alexandra knows that putting her mental health first, however, could have
consequences. “Even though I know that I am ahead of my peers in retirement
savings and that I am lucky to be where I am financially, it all seems so
bleak,” she said. “I have no idea what my peers are going to do.” From her
experiences working with end-of-life legal clients, “who had the benefit of
working in much stronger economies where company-paid pensions were
commonplace,” she’s gleaned that her generation does not have those advantages,
and they’re also contending with rising healthcare costs.
“My mother, who was always responsible with money and retirement savings, joked
that down the road she might have to invest in the ‘Smith & Wesson’ retirement
plan,” Alexandra said. “I’d prefer the ‘nightshade’ plan. The flowers are
pretty, and my hands would be too arthritic and weak to pull a trigger in my
elderly years anyway. What a dystopian world we live in, where killing yourself
before you are too infirm to carry it out feels like a comfort.” ●
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* Shannon Keating is a senior culture writer and editor for BuzzFeed News and
is based in New York.
Contact Shannon Keating at shannon.keating@buzzfeed.com.
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