CHERRY HILL, N.J., Sept. 22, 2020 /PRNewswire/ -- TD Bank, America's
Most Convenient Bank®, announced today that more
than a third of millennials report COVID-19 has negatively impacted
their checking account balance, according to the results of the
latest TD Money Matters Survey.
The survey, which polled more than 1,000 U.S. consumers to learn
more about their financial behaviors and credit habits during the
pandemic, found that millennials were much more likely than Gen
Xers and boomers (31% and 17%, respectively) to report their
checking account balance is decreasing.
Given that information, it's no surprise that the ability for
people to save has also been hindered by the pandemic, as nearly
60% of respondents are not currently saving money. Of those
respondents, more than half (54%) are millennials.
However, the pandemic has not been negative for everyone. Of
those fortunate enough to save money, 38% are saving on average an
extra $1,127 per month due to a
decrease in expenses, including dining out and travel.
Struggling with Saving
COVID-19 has placed additional strain on a generation already
saddled with significant debt and increased living costs. More than
28% of millennials said they tapped into their emergency savings
during the pandemic. Furthermore, one-in-five (20%) millennials
don't even have a savings account.
"A healthy savings account is key to planning for milestone
moments and unexpected hardships," said Lindsay Sacknoff, Head of Consumer Deposits,
Products and Payments, TD Bank. "With COVID-19, many people are
experiencing unplanned circumstances. This is a good time to take
stock of spending and saving habits, create new financial goals and
stick with them."
Despite these discouraging statistics, many millennials want to
improve when it comes to saving. When asked what they would do if
they had an extra $1,000 right now,
46% revealed that they would put the extra money into savings.
Another 31% of millennials said they have spent time during
quarantine reviewing their finances.
Room for Improvement in Credit Usage
In addition to savings, Americans are struggling with their
credit due to the pandemic. About one-in-six millennials reported
that their credit score had gone down during the pandemic. This is
significantly higher than GenX and Boomers, of which 4% and 3%,
respectively reported a similar drop in their scores. The pandemic
also sent millennials on the hunt for additional credit lines to
support expenses, with nearly a quarter (22%) reporting they
applied for a new credit card since the start of COVID-19.
Many millennials are also lacking basic credit card knowledge.
The survey found that:
- 16% don't know their credit limit
- Nearly half of respondents use more than 30% of their credit
limit
- 34% revolve a balance each month
"Millennials haven't had it easy. They've been impacted by
student loan debt, a recession and a difficult job market. Now,
they face a global pandemic like nothing we've ever seen before,"
said Mike Kinane, Head of U.S.
Bankcard at TD Bank. "Much of their financial situations has been
out of their hands, but there are a few things they can control –
how they budget, how they spend, if they choose to splurge and how
they manage their debt."
Living in the Moment
Millennials continue to indulge on purchases during the
pandemic, despite having less financial stability than older
generations. Forty-two percent of millennials said they still
splurge on themselves, higher than other generations, even though
26% admitted to hitting a negative balance in their checking or
savings account.
Millennials reported the most overspending on online shopping or
food delivery. Unsurprisingly, due to the COVID-19 pandemic,
overspending in these areas has ticked up. What's more striking is
that almost half (48%) of millennials do not keep a budget and
out of those, more than a quarter still do not plan on starting
one.
Conversely, 24% acknowledge the importance of budgeting, thus
plan to start one in the coming year, with 35% adding that the
pandemic has made them want to spend less on their living situation
than they do now.
A few great first steps to building a budget are to:
- Determine net income
- Identify fixed and variable expenses, such as. utilities,
rent/mortgage, credit card bills, student loan payments, groceries,
mobile and internet
- Set realistic goals
- Track spending
- Adjust habits as needed
It's also a good time for consumers to review their credit
score. Consumers can receive one free credit report per year from
each of the three credit bureaus, which is useful in determining
areas that need improving, like payment history and credit
utilization.
To learn more about tools and resources for budgeting and saving
money, visit www.td.com/us/en/personal-banking/finance/.
Survey Methodology
The study was conducted among a representative group of 1,009
consumers across the United States
from June 9 -12, 2020. The survey was
hosted by global research company MARU/Matchbox.
About TD Bank, America's Most Convenient
Bank®
TD Bank, America's Most Convenient Bank, is one of the 10
largest banks in the U.S., providing more than 9.5 million
customers with a full range of retail, small business and
commercial banking products and services at more than 1,220
convenient locations throughout the Northeast, Mid-Atlantic, Metro
D.C., the Carolinas and Florida.
In addition, TD Bank and its subsidiaries offer customized private
banking and wealth management services through TD
Wealth®, and vehicle financing and dealer commercial
services through TD Auto Finance. TD Bank is headquartered in
Cherry Hill, N.J. To learn more,
visit www.td.com/us. Find TD Bank on Facebook
at www.facebook.com/TDBank and on Twitter at
www.twitter.com/TDBank_US and www.twitter.com/TDNews_US.
TD Bank, America's Most Convenient Bank, is a member of TD Bank
Group and a subsidiary of The Toronto-Dominion Bank of Toronto, Canada, a top 10 financial services
company in North America. The
Toronto-Dominion Bank trades on the New
York and Toronto stock
exchanges under the ticker symbol "TD". To learn more, visit
www.td.com/us.
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SOURCE TD Bank