The impact of financial stress

Do you feel stress about your finances? If so, join the club! 

Financial issues pester more Americans than smoking and obesity combined. Today, only 15% of us smoke and 42% are obese, but a full 77% of us are stressed out about our finances.

Stressful economic conditions

The economic downturn we experienced in 2020 due to COVID gave many Americans a clear sense of how financially vulnerable they are.

• April of 2020 saw the largest increase in the ranks of the unemployed since Bureau of Labor Statistics started tracking unemployment in January of 1948. Unemployment rates have improved since then, but are still hovering around 6%. 
• The picture gets even dimmer when you add the so-called underemployed – those who are working part-time but want full-time work and those who are working low-paying jobs to make ends meet despite being highly skilled workers. The total of unemployed and underemployed, which some consider to be the true measure of unemployment, is currently 10.7%.
• Unemployment and underemployment are even higher in the hardest-hit industries, like travel and restaurants.

Financial stress affects people at all income levels. The impact: We are less likely to make smart decisions regarding how we handle money.

Personal financial struggles add to our stress

Consider these harsh facts about Americans' finances:

• 63% live paycheck to paycheck.
• 35% of workers have lower emergency savings now than they did before the coronavirus pandemic started.
• 21% have no emergency savings at all.
• 35% of workers have no retirement savings.

These financial worries take their toll both mentally and physically. Stress is bad for your physical health and makes you more likely to experience increased anxiety and depression.

 
Fortunately, there is some relief for financial stress. Many companies offer financial wellness programs as an employee benefit. Check your company’s intranet page on employee benefits to find out if your company offers such a program.

 
Check out these other money tips: 

• Six tips on how to cope with financial stress
• Should you grow emergency savings or pay off debt first?
• Yes! Money actually buys happiness, but it depends how you use it
• What’s the difference between banks and credit unions?