The results of a poll released this week showed that financial stress has become a prevalent issue among Americans.
CNBC and Momentive recently published the findings of their “Your Money Financial Confidence Survey.”
They polled 4,336 adults living in the United States on March 27-31, asking them a series of questions about the state of their personal finances and how they feel about them.
A whopping 70% of respondents reported feeling financially stressed at this time.
With this year so far characterized by persistent inflation, soaring interest rates, reports of banking sector instability, forecasted gas price increases, and ongoing layoffs, it is no wonder.
In fact, residents of North Texas now claim to need about $11,000 more than they did last year, as The Dallas Express reported, totaling approximately $65,000 per year after tax.
While the poll found that financial anxiety was felt by 54% of those aged 65 and up, it was much more pronounced amongst younger Americans. About 75% of those aged 18 to 34 and 73% of those aged 35 to 64 said they were concerned.
This gap could have to do with different generations facing different stressors.
Since data suggest the average American is most in debt when they are middle-aged, those in their 30s or 40s with mortgages and car payments might be worried more about their ability to pay them off.
For recent high school graduates about to enroll in college, inflation has led to many schools raising their tuition fees, as The Dallas Express reported.
In fact, a recent poll conducted by Retirement Investments found that the need for financial support was actually the number one reason given by millennials and Gen Zers to explain why they were still living with their parents, as The Dallas Express reported.
This has also impacted older Americans, with one in five parents with adult children at home reporting in the same poll they have sacrificed retirement savings to help them.
With this in mind, many Americans who are approaching retirement age might be struggling with how to begin saving for it or are worried that they haven’t saved enough.
A recent survey by Clever found that 37% of retirees reported having no savings for retirement.
Other results of the CNBC poll hint at some of the more widespread causes of the financial stress felt by Americans.
For instance, it found that 53% of Americans have no emergency savings. Of the 47% that do, around 26% have less than $5,000 saved.
“People are worried that the money they’ve saved won’t last and are worried they’re going to have to lean more on their credit cards and other sources of debt just to get by,” Bruce McClary, senior vice president of the National Foundation for Credit Counseling in Washington D.C., told CNBC.
Debt has increased nationwide, as The Dallas Express reported. November alone saw U.S. consumer borrowing rise by nearly $28 billion, per Federal Reserve data.
The rising cost of living, along with higher borrowing rates on various types of loans, has significantly reduced the financial cushion of many individuals.
CNBC’s poll saw 58% of respondents report living paycheck to paycheck. This was the case for 78% of those reporting having household incomes totaling under $50,000.
Yet this was also true for 61% of respondents with household incomes of $50,000 to $99,999. This share was roughly halved among those with household incomes of $100,000 or more, at 32%.
“Whether or not you have significant wealth, everyone is feeling squeezed,” Misi Simms, a portfolio manager at the Fortune 100 company TIAA, told CNBC. Financial experts told CNBC that there are two main ways to reduce these high levels of financial stress.
The first is to escape the cycle of living in “survival mode” by improving your “financial mood,” Lindsay Bryan-Podvin, a certified financial therapist based in Michigan, explained to CNBC. “One of the easiest ways to put this concept into immediate action is by starting to celebrate any small financial ‘wins’ you achieve on a daily, weekly, or even monthly basis,” Bryan-Podvin said.
Having achievable goals can help to feel like you have more control over the situation and improve your overall outlook. Next, it is important to improve your financial literacy, which is connected to your financial wellness. Understanding how to better manage your budget and make decisions with your cash will have far-reaching effects.
“Understand where money is coming from and where it is going,” Simms advised, per CNBC.
It is worth noting that despite lots of talk about a looming recession, it hasn’t happened yet, per Forbes. Economic indicators such as GDP, the stock market, and the unemployment rate continue to log favorable results.
In the meantime, improving your own financial state is an important way to feel more prepared for whatever economic scenario may lie ahead.