Financial Stress Statistics: The Ongoing Impact On Mental Health And Society At Large
With the ongoing effects of a global pandemic, rising inflation, and economic uncertainty, financial concerns continue to be a major source of stress for a significant number of Americans. For many, these concerns don’t only impact their bank account but their mental health, relationships, and quality of life as well. Here, we’ll examine current financial stress trends and statistics, the impacts of financial stress on mental health, and practical strategies that may help a person regain financial control and manage stress and anxiety.
Financial stress statistics: the current state of money worries in the United States
Financial stress is an ongoing and widespread issue affecting millions of Americans and people worldwide. A 2024 Bankrate mental health survey reveals that a significant portion of adults report feeling stressed about their financial situation. Specific statistics from this report include:
- 47% of US adults report that money negatively impacts their mental health.
- 59% of respondents who say money is negatively impacting their mental health cite difficulty paying for everyday expenses as a major source of financial stress.
- 51% of those who identify as women report experiencing financial stress compared to 42% of those who identify as men.
- 53% of low-income households (earning less than $50,000 annually) say money negatively impacts their mental health compared to 40% of households making $100,000 or more.
Inflation, rising interest rates, and the effects of the COVID-19 pandemic have exacerbated these concerns. For many, the ability to afford everyday expenses has become a daily struggle, leading to heightened levels of financial anxiety.
The link between money worries and mental health
When individuals experience financial stress, it often triggers a cascade of emotional and psychological challenges.
Personal finance and stress
Personal finances are often deeply intertwined with mental well-being. The pressure to manage a budget, save for the future, and avoid overspending can feel overwhelming. Some statistics that speak to this include:
- 56% of young adults say financial stress negatively affects their mental health.
- People who have depression and problem debt are 4.2 times more likely to still have depression 18 months later than people without financial difficulty.
- A 34% increase in absenteeism and tardiness at work has been linked to financial stress per the TIAA Institute research.
- 42% of US adults say money negatively impacts their mental health, with financial stress potentially leading to anxiety, depression, and anger.
- As of May 2024, 27% of US adults say they have no financial support in the form of emergency savings.
Credit card debt and stress
Credit card debt is one of the top financial stressors for many individuals. High-interest rates and minimum payments that barely make a dent in the principal balance can create a sense of being trapped. Additional statistics on debt include:
- In Q3 2024, US credit card balances increased by $24 billion to reach a total of $1.17 trillion.
- The average credit card debt per household in the US is approximately $7,951, with many individuals carrying balances month-to-month.
- In 2023, credit card delinquency rates surged more than 50% and reached the highest level since 2012, suggesting that more people are struggling to keep up with payments.
How money can impact relationships
Financial stress doesn’t just affect individuals. It can also have a profound impact on family and partner relationships. Disagreements about money are a common source of conflict, and the strain of financial instability can lead to arguments, resentment, and even the breakdown of relationships. For example, statistics show that:
- Women who say they argue about money “often” in their marriage are almost three times more likely to divorce compared to those who argue about money less frequently.
- Two in five adults admit to committing financial infidelity, such as hiding purchases or lying about debt, which can erode trust and damage relationships.
Some widespread effects of rising costs, credit card debt, and financial stress
The effects of financial stress extend far beyond individual well-being. They can also ripple through society, influencing workplace productivity, healthcare costs, and even social dynamics on a worldwide scale.
Examining global financial stress statistics
Global financial stress statistics highlight the widespread impact of financial anxiety across different regions and demographics. For instance, consider that:
- An annual survey on mental health among millennials and Gen Z reveals that financial worries are once again the top concern in 2024, with half of Gen Zs (50%) and 47% of millennials “saying that their longer-term financial future contributes a lot to their feelings of anxiety and stress.”
- One in three full-time employees say financial worries affect their productivity at work, with many reporting increased absenteeism due to money worries.
- One in four adults globally report that debt causes significant stress in their lives, with credit card debt, personal loans, and student loans being some of the most common sources of financial stress.
The importance of financial stress management
Given the far-reaching consequences of financial stress, effective stress management strategies can be essential. Learning to manage worries related to money may help improve mental health, strengthen relationships, and enhance overall quality of life.
Realistic money management strategies
While external factors like inflation and rising costs are beyond individual control, there are steps you can take that may help you manage your financial situation and reduce stress. Some basic strategies include:
- Create a budget: Tracking income and expenses can provide a clearer picture of your financial situation and help identify areas where adjustments can be made.
- Build an emergency fund: Even small contributions to a savings account can help you build up a safety net for when unexpected expenses arise.
- Prioritize debt repayment: Focusing on paying down high-interest debt may alleviate some of the pressure associated with credit card balances.
- Seek professional guidance: Consulting a financial advisor can often provide valuable insights and help individuals develop a plan to achieve their financial goals.
Exploring personal finance resources
There are some resources available to provide support and guidance on practical financial matters. For example, many organizations offer free or low-cost debt management and financial planning services, particularly for underserved communities. Programs like the Financial Planning Association (FPA) and the Coordinated Assistance Network (CAN) can help connect individuals with resources that may suit their needs.
Exploring money-conscious mental health resources
By combining financial planning with mental health support, individuals may be able to take a holistic approach to managing stress and building resilience in the face of financial challenges. Programs such as the National Alliance on Mental Illness (NAMI) provide free resources, including helplines, educational materials, and peer support networks. Additionally, online platforms like BetterHelp can provide affordable, professional guidance for managing stress related to personal finances and other mental health concerns.
How therapy can help individuals address financial stress
Therapy can be a valuable tool for addressing the emotional and psychological impact of stress. By working with a mental health professional, individuals may be able to develop coping mechanisms, challenge negative thought patterns, and build resilience in the face of top financial stressors.
That said, not everyone has therapy providers in their area, and some are not able to travel to and from in-person appointments due to busy schedules, disability, or transportation issues. Online therapy may represent a more convenient alternative in such situations.
The effectiveness of online therapy
Research suggests that, in many cases, online therapy can be just as effective as face-to-face sessions for treating various mental health conditions. Examples include anxiety, depression, and stress-related disorders, which can often be contributed to or exacerbated by financial stress. Online therapy can also be more affordable than traditional in-person therapy without insurance, which may lower another barrier to care for some.
Takeaway
Financial stress is a pervasive issue with profound implications for mental health and society at large. By understanding the root causes of financial anxiety and implementing practical strategies, individuals may be able to take control of their financial situation and improve their overall well-being. Whether through budgeting, seeking professional guidance, or exploring mental health resources, there are steps a person can take that may help them manage financial stress and work toward building a more stable future.
What percentage of stress is caused by money?
71% of Americans rate finances as their highest stressor in the past year in a recent survey. Managing debt, budgeting, and coping with higher prices of the average home in the US economy is difficult for most Americans, leading to increased stress and a higher risk of mental and physical health conditions. When people are financially stressed, stress levels rise, potentially causing depression, anxiety, and other symptoms and conditions.
What is the financial stress score?
A financial stress score is a system to detect when a business may fail within the next 12 months. A higher financial stress score signifies a higher chance of companies failing, whereas a low score means the business is doing well and getting many consumers or clients.
What percentage of people struggle financially?
According to the above study, 71% of people are experiencing financial stress. Younger generations, like Gen Z, may struggle differently than older generations, such as Baby Boomers. For example, older adults might be focused on retirement funds, investments, and security, whereas younger people may be more likely to live paycheck to paycheck and struggle to save money for large purchases like a house. Younger people may also struggle to find financial support and may not be educated in financial literacy. With higher rent prices and steep student loans, many young generations struggle to get out of poverty.
What is the main cause of financial stress?
Being low-income or unemployed has been the most significant cause of financial stress for individuals in the past couple of years, potentially because being homeless can be extremely dangerous and difficult to escape in the current society. Some people may not qualify for unemployment benefits or may struggle to find affordable advice from an advisor or therapist to move forward. In addition, a loss of money or assets has a strong link to trauma and PTSD.
What is the biggest financial stress?
For many people, worrying about losing their homes or the ability to care for their families is a significant stressor. Debt can also be stressful, especially if someone has a low credit score and struggles to find a place to live.
How do you measure financial stress?
Financial stress in businesses is measured using the OFR Financial Stress Index. The business's financial health measures this type of stress and determines whether it is bringing in a profit or debt. In this case, the word stress indicates failure or loss, not emotional stress.
What are the indicators of financial stress?
Financial stress in an individual can have symptoms like any type of stress, including but not limited to the following:
- Headaches
- Chronic body pain without a known cause
- Difficulty regulating emotions
- Confusion
- Loss of memory
- Loss of motivation
- Fear
- Other physical symptoms, such as shakiness or sweating
- Inflammation in the body
What does financial trauma look like?
Financial trauma is different for each individual. For some people, a financial trauma could be gathering thousands of dollars in debt and losing their assets. For others, financial trauma might be getting scammed or losing their home. Financial trauma can lead to PTSD in some people.
What are stress tests in finance?
Stress tests in finance look at the current economic model of a business and determine the likelihood of its success within the next year. A business that doesn’t pass this test may have losses in income.
Can you get PTSD from financial stress?
People can get PTSD from financial stress and the stressors that cause this type of stress, such as losing their home, not being able to provide for their families, or experiencing financial inequalities.
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