5 Things To Know About Personal Finances During The Pandemic

Here are five things you might want to know about personal finances during the pandemic. Across the 50 states, many citizens experienced similar financial hardships due to the unexpected events of COVID-19. Surprisingly, people’s finances were not as negatively affected as one might have thought during a pandemic. Although newly released 2020 data shows trends of personal finances during the brunt of the pandemic, the economy will continue to be affected by the recovery of our world post-COVID-19.

• Across the 50 states, personal income increased by $22 billion on average. This increase from 2019 to 2020 suggests that the federal stimulus packages helped compensate for the financial uncertainties of the COVID-19 pandemic. Stimulus checks and government forbearance on student loan debts are examples of how the United States dealt with the possible struggles of personal income in 2020.

• In 2020, California had fewer nonbusiness bankruptcy filings than in 2018-2019. California bankruptcy filings decreased by more than 20 percent, which makes this statistically significant. Nonbusiness bankruptcy filings include debt incurred by an individual primarily for personal, family, or household purposes. The decrease in bankruptcy rates suggests that California residents may have been financially prepared for a crisis.

• In 2020 the total credit card debt per capita across all 50 states decreased by roughly $388. Luckily, Alaska saw the largest decrease in credit card debt from 2019-2020 at $500 per capita. The pandemic caused many people to stay home and quarantine from March-June 2020. Due to stay-at-home orders placed in early 2020, perhaps no one actively felt the need to spend more than what they were making, thus leading to a decrease in credit card debt. The pandemic gave individuals the ability to slow things down in a time of uncertainty.

• In Illinois, the tax burden share of income ranking remained unchanged. Wallethub’s tax burden share of income measures what individuals pay in taxes. This means that taxes did not increase in 2020. In order to recover from the financial hardships of the pandemic, we might see an increase in tax burden during the upcoming post-pandemic years.

• In the past decade, minimum wage rates have increased every year across all 50 states. Specifically, from 2019-2020 minimum wage rates increased the greatest than in between any other years over the past decade. This minimum wage increase reflects the incentives of businesses and employees to keep working in times of fear and distress.

Anna D’Aprile is a press and communications intern at Truth in accounting