One of the most prevalent and enduring types of stress is financial stress. Managing money has been especially difficult with the relentless financial constraints over the past couple of years: A global pandemic, a potential recession and persistently high prices. When keeping up with finances doesn’t go well, it seems like nothing else does either.
Financial stress refers to a feeling of worry or anxiety over money, debt and various expenses. In a March 2024 Bankrate survey, 47 percent of U.S. adults said money has a negative impact on their mental health, including causing stress.
Even though many external variables might be blamed for financial stress, there are strategies to lessen it and make improvements.
Here is a complete breakdown of financial stress in the U.S. today and some solutions to help with managing it.
Key statistics
Bankrate surveyed U.S. adults in March 2024 on how money affects their mental health. Some of the survey’s findings include:
- Roughly 65 percent of all U.S. adults who say money negatively impacts their mental health said it was caused by economic factors.
- The top cited money-related issue negatively impacting mental health is difficulty paying for everyday expenses, with 59 percent of respondents saying it had a major impact on their mental health.
- Women are more likely to experience financial stress than men — 51 percent of women said money has a negative effect on their mental health, compared to 42 percent of men.
- Low-income households are more likely to say money has a negative impact on their mental health — 53 percent of those with household incomes of less than $50,000 said they worry about it. This is a decrease of 6 percent from 2023.
- Middle generations are more stressed about money over younger and older generations, with 54 percent of Generation X (ages 44 to 59) and 50 percent of millennials (ages 28 to 43) reporting that money is a source of stress.
Financial stress trends
The Financial Health Institute defines financial stress as: “A condition that is the result of financial and/or economic events that create anxiety, worry or a sense of scarcity, and is accompanied by a physiological stress response.”
Financial stress can affect someone’s relationships, work and ability to carry out everyday tasks. The American Psychological Association (APA) also finds that there is a strong link between stress and physical health. Stress can lead to chronic muscle tension, long-term heart problems and stomach pains, among other adverse health conditions.
Social media has made many people feel worse about their finances, a Bankrate poll from September 2023 found. Twenty percent of adults surveyed said seeing others’ social media posts caused them to have negative feelings about their finances. That number is higher for Gen Z and millennials — 30 percent for each.
Financial stress and inflation
Inflation rose to an annual rate of 9.1 percent in June 2022, the highest rate in 40 years. The inflation rate has since trended downward, landing at 3.4 percent year-over-year for May 2024, but consumer prices are still high. Over the past year, inflated costs have had a significant impact on people’s finances and their ability to afford everyday purchases.
Inflation can cause individuals to feel stressed about spending and the general state of the economy. Among survey participants who cited the economy as the primary cause of their stress, specific economic factors listed were:
- Inflation/rising prices (65 percent)
- Rising interest rates (28 percent)
- Not having a stable income/job security (33 percent)
Furthermore, the rise in prices of consumer goods can affect other money-related issues cited as causes of stress, including:
- Not having sufficient emergency savings
- Being in debt
- Not having enough discretionary spending money
While high prices continue to eat away at budgets, it’s important to focus on what’s in your control. Avoid the temptations of impulse purchases — making and sticking to a budget can help you do so. Having a budget can also help you track your spending and evaluate where changes can be made across different spending categories to help reduce some expenses.
Financial stress and emergency savings
Not having a sturdy basis of financial support to withstand financial volatility can make individuals feel stressed and overwhelmed. The Bankrate financial wellness survey found that not having enough emergency savings has negative effects on mental health for 56 percent of consumers.
Indeed, circumstances beyond your control can seriously disrupt your life, especially when you don’t have emergency funds to fall back on. And according to Bankrate’s 2024 emergency savings report, 32 percent of consumers have less savings compared to a year ago. Nine percent of respondents report having no savings.
It can be difficult to build an emergency fund when your budget is constrained by high prices and being stressed might make you more likely to spend emotionally to cope. It’s important to focus on finding room for small adjustments first — such as setting up automated transfers of small amounts each month or reducing spending in one area of your budget — and then building your fund from there over time.
Financial stress by generation
Middle generations are more likely to report being financially stressed overall than their Generation Z (ages 19 to 27 ) and baby boomer (ages 60 to 78) counterparts.
Gen X (ages 44 to 59) had the highest share saying money negatively impacts their mental health, followed by millennials (ages 28 to 43) — 54 percent and 50 percent respectively. Meanwhile, 47 percent of Gen Zers and 40 percent of baby boomers said the same.
Previous findings indicated that younger generations were the most stressed, but that title has since shifted to middle generations. One reason could be that middle generations may be caring for both children and older parents, putting them in a more vulnerable position to be affected by high prices.
| Generation | Top financial stressors for each generation | Share that say it’s a financial stressor |
|---|---|---|
| Baby boomers (ages 60-78) | Inflation/rising prices | 65% |
| Gen X (44-59) | Inflation/rising prices | 69% |
| Millennials (28-43) | Inflation/rising prices | 69% |
| Gen Z (19-27) | Paying for everyday expenses | 52% |
Financial stress by race/ethnicity
Inflation/rising prices is a top financial stressor among all races/ethnicities. While stress levels are higher among Black and Hispanic individuals about other concerns — such as discrimination, according to the APA data — economic factors were most cited as a financial stressor for white individuals.
Bankrate’s financial wellness survey found that 67 percent of white individuals who said money affected their mental health cited inflation/rising prices as a top financial stressor. For Black and Hispanic individuals, that share is 56 percent and 64 percent respectively.
| Race/ethnicity | Top financial stressors for each race/ethnicity | Share that say it’s a stressor |
|---|---|---|
| White | Inflation/rising prices | 67% |
| Black | Inflation/rising prices | 56% |
| Hispanic | Inflation/rising prices | 64% |
| Other | Not having enough emergency savings | 59% |
Financial stress by income level
Financial stress appears to be felt hardest by individuals who have less money to work with from the start. Those with annual incomes of less than $50,000 reported feeling the most financial stress, with 53 percent saying they feel stressed by money, compared with 40 percent of those making $100,000 or more, according to Bankrate data.
| Income level | Top financial stressors for each income level | Share that say it’s a financial stressor |
|---|---|---|
| Under $50,000 | Paying for everyday expenses | 66% |
| $50,000-$79,999 | Inflation/rising prices | 65% |
| $80,000-$99,999 | Inflation/rising prices | 75% |
| $100,000 or more | Inflation/rising prices | 58% |
Financial stress by education level
Financial stress caused by the economy varies somewhat by education level. Those who have completed some college, but have less than a bachelor’s degree, had the highest share who cited economic factors as a stressor, according to Bankrate’s data. The study revealed that 64 percent among this group, of those who are stressed about money, said inflation/rising prices is a top financial stressor. Those with post-graduate education had the lowest share saying they were stressed about the economy (61 percent).
| Education level | Top financial stressors for each education level | Share that say it’s a stressor |
|---|---|---|
| No HS, HS Graduate | Inflation/rising prices | 66% |
| Some college, 2 year | Inflation/rising prices | 64% |
| 4 year | Inflation/rising prices | 65% |
| Post Grad | Inflation/rising prices | 61% |
5 ways to manage financial stress
Although external factors have a significant impact on financial stress, it’s important to focus on what’s in your control and establishing healthy financial habits. Here are five ways to help manage your financial stress:
- Take financial decisions one at a time. Confronting multiple decisions all at once can be overwhelming and cause you to avoid dealing with any of them. Try spacing out the financial decisions you need to make, whether they’re about refinancing, making a new budget or determining your savings.
- Prioritize essential bills. Deciding what bills you have to pay first can help you stay prepared, and it gives you an opportunity to evaluate whether some bills can be reduced or eliminated.
- Track spending with a budget. Writing out a budget and keeping track of expenses can give you a concrete idea of how much you’re spending and what you need to pay for. There are also budgeting apps that can do some of the menial work of making a budget for you. Having a budget can help you stay prepared for upcoming payments and feel more in control of your finances.
- Keep saving each month. Having an emergency savings fund is especially important when you’re stressed — it can give you a cushion of support and make you feel less anxious about the future. Also identify and prioritize savings goals to keep you motivated and help track your progress.
- Reach out for support. A trustworthy support system is an invaluable part of becoming financially healthy and successful. Having people who can offer support and advice, whether it’s friends and family or a financial advisor, gives you an opportunity to talk through your stressors and receive a helping hand.
Financial stress resources
- Financial Planning Association (FPA): The FPA is dedicated to offering free financial planning advice to at-risk or underserved communities, including low-income individuals, military veterans, domestic violence survivors, those with serious medical crises and more.
- Coordinated Assistance Network (CAN): Applicants to the CAN are connected to multiple nonprofit organizations across the nation that are aligned to their individual needs. The CAN portal also offers a number of self-management tools, and it’s all free of charge.
- Your bank: Many banks offer counseling services or financial advice. Reach out to see if there’s someone at your bank who can help you manage your finances.
- Supplemental Nutrition Assistance Program (SNAP): If you’re worried about being able to afford food, SNAP provides benefits to low-income individuals and families to help them pay for food.
- The Calm app: Calm offers a free and premium version of its app. The free version comes with several features to help you manage stress and meditate, including breathing exercises, a mood tracker and guided meditations.
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