The signs are abundant that Americans are deeply anxious about their financial condition, and that problem isn’t going away anytime soon.
According to a recent study by the Financial Health Network, the proportion of Americans deemed “financially healthy” fell for the first time in the five years the FHN has been tracking money and mental health.
The survey noted the percentage of Americans who are financially healthy fell from 34% in 2021 to 31% in 2022. Additionally, a majority of Americans participating in the survey said expenses were larger than household income; did not have sufficient short-term savings, and weren’t confident about their long-term savings prospects.
“The reason there’s so much financial anxiety these days – anywhere between 50 and 80 percent of investors have it according to recent articles – is hardly a surprise,” said Access Wealth certified financial planner Leo Chubinishvili. “An environment like today, where inflation is the highest it’s been in nearly a half-century coupled with slumping stock and bond markets and a potential recession on the horizon, is certainly a good reason for concern.”
A Sticky Issue
The actual financial anxiety landscape covers more ground than experts may think.
“For some, it can be due to a general lack of education or understanding of your financial welfare and/or a realization – far more likely now than during the recent bull market prior to 2022 – that your money seems to be going out much faster than it’s coming in,” Chubinishvili said.
Money worries can also expand due to a real-life event.
“The loss of a job, expensive medical emergency, death of a loved one, changing circumstances like the birth of a child or caring for an elderly parent, and/or a lack of preparation can also generate anxiety,” Chubinishvili added.
No matter what the issue, mounting financial anxieties need to be dealt with, and quickly.
“Financial anxiety is a massive issue," said MEvolution chief executive officer Sarah Deane. "Left unaddressed without the tools to identify its presence and the toll it may be taking on your life and mental well-being, it can easily compound and become an energy blocker. This means spending unnecessary time and attention worrying more than problem-solving.”
Getting Help for Money Anxieties
The good news is that there are positive steps consumers can take to relieve growing financial jitters.
But you have to get moving, experts say. These steps are among your best bets right now.
Talk to a financial expert to determine the best way forward for your personal financial situation.
“This could mean setting a budget, getting together an emergency fund, and managing your debt. If it’s available to you, leveraging earned wage access solutions could also be helpful,” said Earnin chief executive officer Ram Palaniappan.
Boost your credit scoring knowledge. Understanding how to build credit and how to stay on top of your credit can give you a greater sense of empowerment about money. “If you know what to expect when it comes to credit, it may seem less scary,” said Credit Karma chief people officer Colleen McCreary.
Have a plan to repay any debt before you borrow. Debt can have real and long-lasting consequences. “Yet having a solid debt repayment plan in place could help you start paying down your debts and help you stress less,” McCreary noted.
Be transparent. For money-related stress with friends and family, communicate – and be honest – about how you can spend your money and time.
“If money is a source of stress among friends and family, you may be afraid to have a conversation about it. When it comes to showing your appreciation for those close to you, think about how you can do so in ways other than money, like with your time,” McCreary added.
Ask for help. Don’t feel you have to deal with money anxiety alone.
“When you don’t feel well you call a doctor,” Chubinishvili told TheStreet. “Similarly, when your finances make you anxious, call your financial planner. A good planner will hold your hand and walk you through difficult times. They will not let your emotions get the best of you.”
Consulting with a financial professional can also prevent you from making poor decisions that lead to anxiety.
“Have the advisor build a financial plan including analyzing your status and developing projections, implementing recommendations and, ultimately, monitoring the plan,” Chubinishvili told TheStreet.
Don’t ignore the problem. People should not leave anxiety unaddressed to fester and worsen. “Anxiety is a natural emotion that alerts the mind to a problem that needs to be solved,” Deane said. “It’s then that the real work needs to begin, to find a solution and address the issue head-on.”
