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Americans' Views of Their Financial Situation Worsen

Americans' Views of Their Financial Situation Worsen

Story Highlights

  • 35% say they are financially better off than a year ago, down 24 points
  • 63% think they will be better off one year from now, down 11 points
  • Democrats more optimistic than Republicans about finances improving in 2021

WASHINGTON, D.C. -- Americans' views of how their personal financial situation has changed have dropped precipitously from this time last year, reflecting the impact of the coronavirus pandemic on these perceptions. After hitting a record high one year ago, the percentage of U.S. adults who say they are now financially better off than they were a year ago has tumbled 24 points to 35%, the lowest reading since 2014. At the same time, 36% say they are worse off and 28% volunteer that their situation is the same.

Line graph. Americans' views of whether they are financially better or worse off now than they were a year ago, trend since 1976. The latest reading of 35% who say they are better off is the lowest since 2014, having dropped 24 percentage points since one year ago. The worst reading since the trend began in 1976 is 55% saying they were financially worse off in 2008.

These latest findings, from a Jan. 4-15 Gallup poll, are consistent with Americans' current negative views of the national economy. While U.S. adults' assessments of their own economic situation are lackluster, they are far from the worst Gallup has recorded in its 45-year trend. Twice in 2008, during the Great Recession, a historical high of 55% of Americans said they were financially worse off than they had been the previous year, one of three times (the other was 54% in 2009) that a majority responded this way.

These personal financial assessments are more pessimistic than those found in another Gallup measure during the pandemic. Americans' ratings of their personal financial situation as excellent, good, fair or poor saw only modest changes between April and June 2020 compared with a pre-pandemic reading in April 2019.

Yet even though Americans rated their financial situations similarly to before the pandemic, they were much less inclined to say their situation was getting better. This indicates people may respond differently when asked to evaluate the current state of their personal finances than when asked to rate how these have changed over a period of time. Assessments of change appear to be influenced greatly by national economic considerations.

Personal Financial Assessments Worsen Across All Subgroups

Americans across all key demographic groups have become less likely to say they are better off financially than they were last year; however, adults aged 18-34 and Republicans have seen the largest declines (32 percentage points each) since 2020. Still, Republicans remain more likely than Democrats to say they are better off.

Although their ratings have declined by double digits, U.S. adults with annual household incomes of $100,000 or more are the most likely group to say they are better off (50%), while those with household incomes under $40,000 are least likely (at 23%) to say the same. Relatively low percentages of women (29%), Democrats (29%) and adults who are not currently employed (28%) report that their financial situations have improved.

Personal Financial Situation 2020 vs. 2021, by Demographic Subgroup
Would you say that you are financially better off now than you were a year ago, or are you financially worse off now? % Better off
January 2020 January 2021 Difference
% % pct. pts.
Male 64 42 -22
Female 54 29 -25
Annual household income
Less than $40,000 45 23 -22
$40,000-<$100,000 64 37 -27
$100,000 or more 68 50 -18
18-34 71 39 -32
35-54 57 33 -24
55 and older 54 34 -20
Party identification
Republican 76 44 -32
Independent 58 36 -22
Democrat 43 29 -14
Employment status
Employed full/part time 65 42 -23
Not currently working 51 28 -23

Optimism Despite Worsening Views

Although Americans' appraisals of their financial situations are currently bleak, a 63% majority expect they will be better off a year from now, while 22% say they will be worse off, a finding that is consistent with every reading since the first measurement in 1977. That is, even during tough economic times, more Americans have predicted their finances would get better rather than worse in the year ahead.

Line graph. Americans' expectations of how they will be financially one year later, trend since 1977. Currently, 63% say they expect to be better off in a year and 22% say they will be worse off. This is consistent with previous readings, in that Americans have always been more likely to say they expect to be better off.

Partisans View Own Finances Through Political Lens

In the current highly polarized political environment, partisans view most issues through a political lens, and their own financial situation is no exception. When the sitting president's party affiliation aligns with their own, partisans generally view their own finances more positively.

The latest poll, conducted at the end of Donald Trump's term and before Joe Biden's inauguration, accordingly finds Republicans offering more-positive assessments than Democrats of how their finances fared over the past year. However, looking ahead, with Biden in the White House, Democrats are now more optimistic than Republicans about their future financial situations. Seventy-two percent of Democrats, up from 60% last year, expect to be better off financially in a year, while 40% of Republicans (down from 83% in 2020) do.

Likewise, in 2009, after Barack Obama took office, the same situation occurred. This pattern was also evident in 2017, shortly before Trump's inauguration -- though with Democrats becoming more pessimistic and Republicans more optimistic.

Line graph. Partisans' expectations of whether they will be financially better off or worse off in a year, trend since 2014. Currently, 72% of Democrats, 68% of independents and 40% of Republicans say they will be better off. This marks a reversal from one year ago, when Donald Trump was in office. A pattern similar to this year's, but with Republicans' expectations increasing, was evident in 2017 just before Trump took office.

Bottom Line

The coronavirus pandemic has taken a toll on Americans in a variety of ways -- emotionally, physically and financially. The rollout of COVID-19 vaccines offers hope of a return to normalcy. Yet, the unemployment rate is stagnating, and businesses nationwide continue to struggle as a result of public health restrictions.

The sharp double-digit reversal in Americans' positive assessments of how their financial situations have changed is in line with the events of 2020, and their optimism about seeing improvement in 2021 is consistent with historical trends. What happens with the coronavirus situation will influence how Americans view their personal finances over the next year. Additionally, previous Gallup findings suggest that people's perceptions of the national economy will have a significant impact on their own personal financial situation, perhaps even more so than their own experiences.

View complete question responses and trends (PDF download).

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