‘A Tale of Two Americas’: New Data from the 2020 U.S. Financial Health Pulse

Friday, October 23, 2020

“It was the best of times, it was the worst of times.” The opening lines of Charles Dickens’ iconic novel A Tale of Two Cities perfectly capture the paradoxical nature of this moment in time.

Since March, the news has often featured contradictory narratives about the impact of the ongoing pandemic on people’s financial lives. On the one hand, the stock market is booming, the national savings rate is soaring, and total household debt has plummeted. On the other hand, unemployment insurance applications have broken records, thousands of small businesses have closed, and lines for food banks stretch for blocks.

So which narrative is correct? Are people in America enjoying a period of relative stability and abundance tied to a soaring stock market, COVID-19 relief measures, and reduced spending? Or has the economic fallout from the pandemic devastated the U.S. economy, depriving millions of people of their lives and livelihoods?

According to new data from the U.S. Financial Health Pulse®, both realities are true. In the recently released 2020 Trends Report, we provide a unique glimpse into how the COVID-19 pandemic is affecting the financial lives of different groups of people in America. Nationally representative survey data collected over the past three years shed light on how financial health has changed against the backdrop of the evolving pandemic. Transactional and account data collected from study participants throughout 2020 add additional nuance and color about people’s financial lives. Collectively, these data sources suggest that various segments of the population have experienced the economic impact of the pandemic in very different ways.

In the 2020 Trends Report, we explore the following key findings:

1) Financial health in America has improved since last year, but these positive trends may prove temporary.

As of August 2020, a third of people in America (33%) were Financially Healthy, an increase from June 2019, when 29% of people were Financially Healthy. These positive trends were driven by improvements across nearly all of the eight indicators of financial health. However, there is reason to believe that these positive trends may prove temporary, since they appear to be the result of pandemic-related interventions and events, including stimulus policies, debt relief measures, economic shutdowns, and shifts in consumer behaviors.

2) The majority of people in America are still not Financially Healthy, and many people are experiencing extreme financial hardship.

More than two-thirds of people in America (approximately 167 million people) were either Financially Coping or Financially Vulnerable as of August 2020. Many of these individuals are experiencing extreme financial hardship: 22% of people considered Coping or Vulnerable said they worried their food would run out over the past three months, and 26% said they worried about affording their rent or mortgage since March. In order to cope with the ongoing effects of the pandemic, more than a fourth (29%) of this group said they spent down their savings, and approximately four in 10 (41%) said they carried a balance on their credit cards.

3) Financial health disparities have widened by race and income and persisted across gender over the past year.

While broad swaths of people saw their financial health improve since 2019, some demographic segments experienced greater improvements than others. For some people – including Black Americans and people making less than $30,000 – financial health disparities have widened. In other cases, such as between women and men, significant financial health disparities persist despite recent positive trends. Without additional investments in long-term solutions that help people lead financially healthy lives, these disparities will only grow.

4) Black Americans, people with low incomes, and women are bearing the brunt of the COVID-19 economic crisis.

Among those who applied for some type of debt relief, Black applicants were the least likely to receive relief, despite reporting unmanageable debt loads at higher levels than other borrowers. People with lower incomes were far more likely than others to say they spent down their savings to cope with the ongoing effects of the pandemic. And women were more worried than men about paying bills and affording basic necessities like food and healthcare in the future. Far from having an “indiscriminate” impact, the COVID-19 pandemic has exploited existing cracks in our society, taking a disparate toll on financially vulnerable populations.

At times, it feels as if the distance between the “two Americas” has never been greater. While many people have seamlessly transitioned to working from home, millions of others have been serving on the front lines of the pandemic, working for low wages with little protection from the deadly virus. While some people’s bank accounts have never been higher, many others are barely hanging on, struggling to put food on the table and keep a roof over their heads.

Yet, in this moment of pain, suffering, and uncertainty, a profound clarity has emerged that things simply cannot continue as they were before the pandemic. There is a growing consensus that we can no longer afford to accept a reality in which two-thirds of people in America are not Financially Healthy and lack a safety net to help them in tough times. Policymakers, employers, businesses, and financial service providers must act now to offer short-term relief to help people cope with the ongoing effects of the pandemic, while also investing in long-term policies that dismantle systemic barriers to financial health. While consensus may seem elusive at times, it has become increasingly clear that now is the time to embrace bold solutions that improve financial health for all.

We invite you to learn more about these trends by reading the 2020 Trends Report and visiting the U.S. Financial Health Pulse website to explore the data.

Interested in Getting Involved with the U.S. Financial Health Pulse?

There are many ways you can get involved with the U.S. Financial Health Pulse. We are eager to share new data and findings and discuss what they mean for your strategic priorities. We are also looking for companies interested in contributing ongoing funding and sponsorship to the initiative. If you are interested in learning more about these opportunities, please reach out to Thea Garon at

This post is part of a series from the authors of the U.S. Financial Health Pulse. In the coming months, we plan to discuss different cuts of the data and respond to compelling questions and feedback we receive from our audience.

The U.S. Financial Health Pulse is made possible through a founding partnership with Flourish, a venture of The Omidyar Group. Additional support is provided by MetLife Foundation, founding sponsor of the Financial Health Network’s financial health work, and AARP. The Financial Health Network is partnering with the University of Southern California Dornsife Center for Economic and Social Research to field the survey to their online panel, the Understanding America Study. Study participants who agree to share their transactional and account data use Plaid’s data connectivity services to authorize their data for analysis.

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