One of the most prevalent forms of stress these days is financial stress. Over the past few years, between the pandemic, inflation, the potential for a recession, and overall economic distress, money is on the top of everyone’s mind. According to the American Psychological Association (APA), 72% of Americans report stressing about money at least some of the time recently.
What is financial stress?
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.”
Let’s dive into some financial stress statistics, which also include financial stress and mental health statistics, from Bankrate’s 2023 survey:
- 52% of US adults said money had a negative impact on their mental health
- 82% of US adults who say money negatively impacts their mental health said it was caused by economic factors
- 56% of people cite not having enough emergency savings as having a negative impact on mental health
- Women are more likely to experience financial stress than men
- Low-income households are more likely to say money has a negative impact on their mental health- 59% of those with a household income less than $50,000 said they worry about it. This is an 11% increase from 2022
- Middle generations are more stressed about money than younger and older generations
- 60% of Gen X and 55% of millennials report money as a source of stress
One major concern aiding financial stress is inflation, which Bankrate says contributes to everyday financial stress. Inflation rose to an annual rate of 9.1% in June of 2022, the highest rate in 40 years. However, the inflation rate has trended downwards since and landed at 4% for May 2023, but consumer prices are still high. High consumer prices affect people’s ability to afford everyday purchases and necessities.
Financial stress is also prevalent in the workplace. Employee financial stress is at an all-time high, and the impact of financial stress on employees is huge.
PWC’s 2023 employee financial wellness survey states:
- 57% of employees say finances are the top cause of stress in their lives
- 56% of workers spend three or more hours per week dealing with or thinking about personal finances
- 53% say they are most worried about their expenses increasing
- One in three full-time employees say that money worries have negatively impacted their productivity at work
- Financially stressed employees are less engaged at work
- Money stress is stretched across all levels of pay. 28% of workers said they run out of money between paychecks all or part of the time. 15% of those who earn at least $100,000 said the same thing
These financial wellbeing statistics show the effects of stress in the workplace. These include less employee engagement, lower rates of productivity, and a higher turnover rate because employees who are stressed about money are more likely to be actively pursuing other employment opportunities.
You're probably wondering, as an employer, how to help your employees with financial stress, and the answer is through employee financial wellness programs. 74% of employees state they want help from their employer with their finances.
Financial wellness programs have emerged as vital tools in mitigating employee financial stress. These programs offer more than just knowledge; they provide a foundation for employees to understand, manage, and grow their financial well-being. A well-designed financial wellness initiative can offer personalized advice, budgeting tools, debt management strategies, and even access to professional financial counseling. By providing these resources, businesses are not just investing in their employees' economic health but also in their mental and emotional well-being.
The pressures of financial uncertainty can translate to distractions, lower productivity, and even health issues for workers. However, with a structured support system, employees often feel more confident and in control of their financial futures. They are better equipped to set goals, prioritize expenses, and save for unforeseen events. This security and peace of mind have a direct correlation with improved focus, higher job satisfaction, and enhanced overall performance in the workplace. In sum, financial wellness programs are not just a nice-to-have perk but a necessary strategy in today's fast-paced corporate environment, serving as a buffer against financial stress and its manifold repercussions.