A lot has changed in the last year. April 2020 brought with it the highest rate of unemployment the United States has seen since the Great Depression: 14.7 percent, 23.1 million people unemployed. We now are down to 6.2 percent with 10 million people unemployed. The year has brought many other financial changes, some surprising.

Unequal Financial Impacts

In the not-surprising category, the financial toll on the poorer members of our society was greater than the toll on the wealthier.

The poor carry relatively greater debt loads and have little or no financial buffer to weather shocks to their budgets. They are also more likely to have suffered a job loss or decrease in income as a result of the COVID pandemic. It’s a double whammy.

Make that a triple. They also tend to be less financially literate. They have lower levels of knowledge and capability to navigate our complex financial system and maximize their scarce resources.

In the upper-income levels, people mostly kept their jobs and many pulled ahead financially. They maintained their income and reduced their discretionary expenses — there was a lot less travel and a lot less dining out.

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At the lower-income levels, wages were lost or reduced and there was far less room to cut expenses. Not being able to jet across the country or dine in fine restaurants doesn’t ease your budget when you couldn’t afford to jet across the country or dine in fine restaurants to begin with.

Poor people were more likely to lose income due to the pandemic and less likely to have resources to fall back on. The 23.1 million people without work a year ago were not primarily bankers and lawyers; they were primarily hourly workers dependent on their weekly checks to make ends meet.

Improving Credit

In the surprise category: Americans used the pandemic as an opportunity to improve their credit. True story.

According to Experian, Americans decreased their overall credit card debt by about 9 percent, the first decline in a number of years. They did this while also opening around 12 million new accounts and simultaneously lowering their utilization ratios and reducing delinquencies.

It may seem surprising that Americans would be able to reduce debt and improve important credit metrics while suffering the financial consequences of a pandemic. It is illustrative of the divide between the haves and the have-nots; it shows how many fared well while others suffered greatly.

The most financially marginalized members of society didn’t increase their credit card debt — they can’t get credit cards. The working poor with credit cards couldn’t put many thousands of new debt onto cards — they don’t have the credit limits to do so.

The relatively affluent who were busy not traveling or dining out were able to pay down their debt levels and even catch up a bit, as evidenced by the reduction in delinquencies.

We don’t need an academic study to understand that those most effected by the pandemic, in terms of lost wages and financial challenges, are also less likely to have credit. They are those same primarily hourly workers struggling to make ends meet. The improvement in credit during the pandemic shows where the pandemic hit hardest, and it was not the middle class and above.

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Lifestyle Changes

Americans also made some lifestyle changes during the pandemic, both forced and voluntary.

There was a forced reduction in travel and group entertainment. There were, and in some cases still are, restrictions on travel, dining out, and entertainment venues. We adjusted, with varying degrees of acceptance.

We also found some replacements. This was a banner year for home improvement outlets as people sought out changes to their residences, where many were now spending considerably more time. If a person’s home is their castle, we were seeking significant castle improvements: new decks, landscaping, fire pits and patios, improvements inside and out.

The place we had to spend our time was going to be a place we wanted to spend our time.

Fueled with stimulus cash, those who didn’t suffer financial setbacks often had more disposable income than before. And dispose of it they did.

But for those without a castle to call their own, that was another thing to change.

Housing and Housing Shortages

The pandemic created a few perfect storms. Those with the least reserves got hit the hardest, for example. Real estate had its own perfect storm.

New construction slowed as builders shut down or reduced the scope of their operations. Materials went through periods of shortage, some which still persist. Material prices skyrocketed. New construction was marked by delays and cost increases.

Demand, meanwhile, grew. Two factors have been major contributors. Workers are trending out of urban areas for the relative safety of the suburbs. Less congestion, less contagion, seems to be the thinking. Others want to move from rental to a place of their own, where they too can build a deck or add a firepit. Supply is struggling, demand is up. Price changes were inevitable.

Many areas of the country are experiencing housing shortages and sharply higher prices. Not all places are seeing the same extent of increases, but the issue is broad and prices have increased quite widely.

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Moving Forward

The consequences of the pandemic will always be with us. The loss of life, the suffering; we all know someone who was directly affected or were directly affected ourselves. These things are not repairable.

The financial consequences are generally repairable. We can rebuild and we can overcome, financially. As a country we were ill-prepared, with low stockpiles of crucial equipment and a lack of adequate preplanning.

As individuals, we suffered varying degrees of lack of financial preparation. Many people who didn’t want to acknowledge a need for an emergency fund feel the need for one now. Some people will act on that feeling, and take positive steps to be better prepared for the future. Others will not.

Within ranges people had different things to deal with, generally speaking. The poorest were hit the hardest, and less so on up the income ladder. Inside those ranges, there are further varying degrees of how people were financially impacted.

The financially literate had the knowledge and were often better prepared to deal with adverse financial consequences than were the less financially literate.

Financial literacy matters. We at CentSai, and many others, have been preaching that for a long time. Real people got an unexpected lesson in the importance of financial literacy. It is not just for the rich. It is not just for people with the means to save for a comfortable retirement. It is for everyone.

Those who think they have the least to be financially literate about stand to benefit the most, relatively. If you have a little and use it more effectively, it makes a real and noticeable difference. A rich person who does a little better doesn’t feel it; they only know because their accountant told them they did better.

The working people see improvements due to financial literacy in real ways, building an emergency fund that wasn’t there before, eliminating debt they never thought they could get rid of, building credit and gaining access to additional opportunities such as home ownership, which are opportunities closed to the most financially marginalized members of society.

We can affect how the country performs in the future by whom we elect and the degree to which we hold them accountable.

We can affect how we perform in the future by embracing financial literacy. There is no situation that is too good or too bad to be improved. Financial literacy works for everyone.

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