The ongoing economic effects of the Covid-19 pandemic have taken a bite out of Americans’ savings.
The average amount of personal savings dropped 15% from $73,100 in 2021 to $62,086 in 2022, according to Northwestern Mutual’s recent 2022 Planning & Progress study. And 60% of U.S. adults say that the pandemic has been “highly disruptive” to their finances.
“There could be several factors contributing to the drop in savings from last year, ranging from spiking inflation to people spending more as they resume some sense of normalcy in their lives,” Northwestern Mutual chief customer officer Christian Mitchell said in a press release.
Despite the impact that the pandemic had on respondents’ finances, 48% said they have been able to adapt to their new circumstances. Nearly three-quarters say that they have also adopted better financial habits because of it.
Among the healthy money habits that respondents picked up are spending less money on living costs, tackling debt and increasing investments. In fact, 17% of respondents said they now regularly revisit their financial plans, while 14% said they have increased their savings and retirement contributions.
Another 69% said they plan to maintain their current savings rates, but Mitchell warned that the optimism might need to be taken with a grain of salt.
“It bears watching because while people say they plan to continue saving at an elevated rate going forward, intentions don’t always follow through to action,” he said.
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