Financial stress is a growing problem for many people, and understanding the underlying statistics can help us understand why.
In this post, we’ll explore what the data tells us about financial stress and how it affects different groups of people.
What Are the Top Financial Stressors?
Financial stress can be a major burden for individuals and families alike.
With rising costs of living, it can be difficult to keep up with the demands of modern life.
For many people, the biggest financial stressors include expenses related to housing and transportation such as mortgages and car payments, as well as medical bills and taxes.
Income insecurity is also a key source of stress for those who are unable or only partially able to secure steady employment due to layoffs, illness, underemployment, or other reasons.
In addition, an unpredictable economy can lead to sudden changes in job security or income levels due to market fluctuations.
Financial stress can cause individuals to feel overwhelmed and frustrated, but there are ways to combat the anxieties associated with it, such as budgeting and creating an emergency fund.
Financial Stress Statistics – Highlights
- 65% of Americans feel that money is a significant source of stress.
- Having to talk about money stresses out 32% of the population.
- More than half of all consumers are stressed about money issues related to buying a house, while almost as many are stressed about vehicle purchases.
- 28% of people say they worry about money daily.
- Top causes of financial stress include looking at one’s bank account (for 49% of people), paying bills (41%), and making purchases (34%).
65% of Americans feel that money is a significant source of stress.
(Source: American Psychological Association)
As the cost of living increases and wage growth remains stagnant, it can feel like an uphill battle to make ends meet. In addition, a lack of knowledge about financial planning and budgeting can lead to excessive spending on everything from consumer products to credit card debt.
Finances are often overlooked due to time constraints and busy schedules, making it easy for just about anyone in the US to find themselves in a difficult position financially.
Top causes of financial stress include looking at one’s bank account (for 49% of people), paying bills (41%), and making purchases (34%).
Financial stress can be a major burden in people’s lives and it can come from many different sources. According to recent studies, the main causes of financial stress are looking at one’s bank account, paying bills, and making purchases.
Gen Z’ers are most stressed about finances, with 82% of survey respondents saying they were a major source of stress, with millennials coming in second at 81%.
According to recent statistics, Gen Z’ers are significantly more stressed than their millennial counterparts when it comes to finances. One potential reason could be due to the fact that they are currently experiencing more difficulties arising from the pandemic and its associated economic fallout than millennials did.
Having to talk about money stresses out 32% of the population.
This kind of financial-related tension can be especially daunting if you don’t have a firm grasp on your financial situation or are in debt. It can also be extremely frustrating if money forms a source of disagreement within relationships or families, leaving individuals feeling overwhelmed by their inability to reach an agreement.
Financial worries can also keep people up at night as they attempt to find solutions while stressing over how they’ll come up with the money they need.
Ultimately, money has the power to create serious worry and anxiety, so it’s important to know how best to handle conversations around finances so stress levels stay at a manageable level.
More than half of all consumers are stressed about money issues related to buying a house, while almost as many are stressed about vehicle purchases.
Money can be one of the most stressful aspects of modern life; especially when it comes to needing to make large purchases such as a car or house. This stress is demonstrated by the fact that more than half of all consumers experience stress related to buying a house, with almost an equal number struggling with their vehicle purchase.
This is far from an ideal situation, as these two types of purchases are likely going to be necessary at some point in life. Cutting back on unnecessary spending and budgeting properly will help make this experience less stressful, but it is often still going to remain a daunting task even for experienced money managers.
Women are far more likely to experience financial stress than men, with 46% of women saying money has a negative impact on their mental health compared to just 38% of men.
Women have long experienced an unequal burden when it comes to managing finances. Sadly, this has only been increasing in recent times with an ever-increasing financial strain on women of all ages and backgrounds.
The financial instability is especially alarming, since it can exacerbate existing conditions while also leading to physical, emotional, and psychological issues. Women must be equipped with the skills necessary to increase not only financial literacy but also become knowledgeable about the resources available to help themselves or those around them manage their money better.
Only 16% of people know how to improve their credit score, but 59% of people want to learn more.
It is easy for individuals to become confused about how this important score works and how best to maximize or even repair it. However, overcoming this lack of knowledge and forming good money habits when it comes to budgeting and credit can make a world of difference to people’s financial situations long-term.
28% of people say they worry about money daily.
It’s not hard to understand why people keep these worries at the front of their minds – bills must be paid to maintain a stable lifestyle, and unfortunately, the cost of living often exceeds our income.
Without a budget and financial plan in place, these doubts can turn into a real sense of worry when it comes to meeting necessary expenses each month. Although there may not always be an easy fix, with thoughtful planning and conscious saving, taking control of one’s finances can help bring peace of mind in the face of constant stress.
41% of Americans feel the cost of medical care is one of the biggest financial stressors.
(Source: Best Money Moves)
For those who are uninsured or underinsured, finding quality medical care can be a daunting challenge. When bills start to mount, with no end in sight, it’s further compounded by a sense of helplessness and despair.
Even for those with reasonably good health insurance coverage, navigating through deductibles, out-of-pocket expenses, and rising premiums can be overwhelming from month to month. Something must be done to counter these growing financial pressures placed on individuals and families caused by medical care costs.
Money stress is higher for people who did not go to college (about 32%).
This could be attributed to the fact that, without a university degree, many individuals struggle to find employment that offers sustained income and peace of mind around financial security.
Plus, those without a college degree tend to have fewer assets to pad their savings and incomes in the event of an emergency or economic downturn in the job market. For people without a college education, reducing money-related stress may require taking proactive steps such as creating an emergency fund or setting aside additional funds for unforeseen expenses.
38% of all Americans have less than $1000 to deal with unexpected expenses.
It is disheartening to hear that 38% of all Americans are struggling financially, with less than $1000 to cover any unexpected expenses that may arise. This is often the difference between maintaining financial stability and being stuck in a deep financial hole with no hope of escaping.
With the increasing numbers of people living paycheck-to-paycheck, most cannot even think about setting aside enough money for potential emergency savings.
In fact, the average American only has enough saved up for 2 months, leaving them helpless against life’s curveballs that require a significant financial investment. It is evident that more opportunities need to exist for financial education and empowerment in order to improve the dire situation of so many Americans.
Low-income people say money has a negative impact on their mental health, with 48% of people with household incomes of less than $50,000 worrying about it.
This concern is hardly limited to those who live paycheck to paycheck; it has been shown to impact every level of income, from the very low to the relatively high.
The stress of monthly bills, uncertain income streams, and savings for future costs all come into play for those living an economically constrained lifestyle. Money worry weighs heavily on the minds of these individuals, resulting in an associated decline in overall mental well-being.
Latino adults have the highest rates of financial stress at 75%, with Black adults coming in second at 67%.
With finances causing already precarious situations to become more unstable, now more than ever, meaningful action must be taken to reduce distress levels in areas that are both seen and unseen.
75% of Americans do not seek the help of a financial planner, but those who do notice significantly lower levels of financial stress.
This statistic highlights the importance of seeking professional help when it comes to managing your finances. It also suggests that professional advice can be beneficial in reducing stress related to money management.
This is especially relevant in today’s uncertain economic climate; many people are dealing with unprecedented levels of financial stress due to job loss or decreased wages. Seeking professional advice may provide much-needed relief during these difficult times.
Social media has a significant potential to make people feel worse about their finances, with a third of adults surveyed reporting that seeing others’ posts makes them feel negatively about their finances.
Our social media presence has become an ever-increasing part of our lives; however, this quote suggests that this can take a toll on our mental health as well as our financial situation.
It is easy to compare ourselves to others when scrolling through social media feeds full of seemingly perfect images and captions from other peoples’ lives; however, this can lead us down a dangerous path if we are not careful.
It is important for us all to recognize the fact that what we see on social media does not always reflect reality and remember that everyone experiences hardships and struggles in life regardless of how perfect they may appear online.
46% of people in debt also have a mental health problem.
(Source: Money and Mental Health)
This statistic highlights the often-overlooked connection between debt and mental health issues such as depression and anxiety. People dealing with debt often experience feelings of shame or guilt which can lead to poor decision-making when it comes to money management or other aspects of their life.
Not only that, but financial hardship itself can be extremely detrimental to one’s mental state if it goes unresolved for an extended period of time due to its impact on self-esteem and overall quality of life.
63% of Americans say that COVID-19 has forever changed their financial stress levels.
This speaks to the harsh reality that many people are still feeling the effects of the pandemic financially. The economic fallout from the pandemic has been devastating for millions of Americans, resulting in job losses, reduced wages, and skyrocketing healthcare costs.
51% of adults say that COVID-19 will make it harder to achieve their financial goals.
(Source: Pew Research Center)
As markets across the world are crashing and jobs, especially in the service sector, are being drastically reduced, it’s clear why people feel this way. Economic experts do not expect a rapid recovery anytime soon, and many businesses have already ceased operations completely.
It is an unsettling time for many, made worse by the fact that no one can determine when life will return to normal. For those trying to save money or prepare for long-term investments, it’s unfortunately become harder than ever before due to so much uncertainty about our future economy.
Black and Hispanic consumers tend to be hardest hit by bank fees.
These disparities are due to a variety of structural inequalities that make it difficult for Black and Hispanic households to access affordable banking services—such as low credit scores or lack of access to mainstream banks—which can lead them to rely on expensive alternative banking options that come with high fees.
Households with annual incomes of less than $25,000 report the most financial stress, while those with an income of $100,000 or more had the lowest.
(Source: FINRA Foundation)
The contrast is stark – for those on a lower income, managing daily expenses can be a challenge, and long-term financial planning may seem impossible. These individuals face significant economic barriers, and there are very few chances to make lasting changes in their financial well-being.
For higher-earning households, however, money provides more stability and opportunities to fulfill dreams, such as entering the stock market or opening their own business. In order to reduce financial stress across all income brackets, it is essential we ensure our economy provides access to resources and guidance regardless of how much money one has coming in each month.
Final Thoughts: Financial Stress Statistics
Financial stress is an increasingly common problem for people of all ages and backgrounds. In order to effectively address this issue, it’s important that we understand how different demographics experience financial stress differently so that solutions can be tailored accordingly.
By being aware of these statistics, we can better understand how our own experiences with financial stress compare with those of others and take steps toward improving our own financial situations.