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 the highest inflation rate in 40 years. If keeping up with finances doesn’t go well, it may seem like nothing else does either.

Financial stress refers to a feeling of worry or anxiety over money, debt and various expenses. In a February 2022 study from the American Psychological Association (APA), 65 percent of respondents said money is a significant source of stress. The percentage is higher for younger people and for Black and Hispanic adults.

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:

  • The top cited money-related issue negatively impacting mental health is insufficient emergency savings, with 57 percent of respondents in a Bankrate survey citing it as having a major negative impact on their mental health.
  • Other top cited causes of financial stress include looking at their bank account (49 percent), paying bills (41 percent), making a purchase (34 percent) and having to talk about money (32 percent).
  • The rising costs of consumer goods have an even more widespread impact on people’s mental health, with 87 percent of respondents in an American Psychological Association survey citing it as a significant source of stress.
  • Women are more likely to experience financial stress than men — 46 percent of women said money has a negative effect on their mental health, compared to 38 percent of men.
  • Of those who said money is a stressor, 28 percent said they worry about it daily.
  • The percentage of those who worry about money daily is higher for people who didn’t go to college, at 32 percent.
  • Low-income people are more likely to say money has a negative impact on their mental health — 48 percent of those with household incomes of less than $50,000 said they worry about it.
  • Younger people are more stressed about money, with 82 percent of Generation Zers (ages 18 to 25) and 81 percent of millennials (ages 26 to 43) reporting that money is a significant source of stress.
  • Latino adults had the highest percentage (75 percent) who report money as a significant stressor of all racial or ethnic groups, followed by Black adults (67 percent).

Sources: Bankrate and American Psychological Association

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 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.

In February 2022, the APA reported the highest number of people experiencing money-related stress since 2015 — 65 percent of respondents said money is a significant source of stress.

Social media has made many people feel worse about their finances, a recent Bankrate poll found. Over one-third (34 percent) of adults surveyed said seeing others’ social media posts made them feel negatively about their finances, and that number is higher for Gen Z and millennials — 47 percent and 46 percent, respectively.

Financial stress and inflation

Inflation rose to 9.1 percent in June, the highest rate in 40 years. It has hardly eased up in recent months, decreasing slightly to 8.3 percent in August. The rise in prices has 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. In the APA’s “Stress in America: 2022” survey, 87 percent of respondents said that the rise in prices due to inflation is a significant source of stress.

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 inflation continues to surge, 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 COVID-19

Though the peak of COVID-19 has passed, its effects linger. The “Stress in America” survey reported that 63 percent of respondents said their lives have been forever changed by the pandemic, and 87 percent said it feels like there has been a constant stream of crises over the past two years.

The effect of COVID-19 on consumers’ finances is no trivial matter. Among non-retired adults, 51 percent said that COVID-19 will make it harder to achieve their financial goals, the Pew Research Center found in 2021. Further, 44 percent of those whose finances were negatively impacted by the pandemic said it will take three years or more for their finances to fully recover.

Many may have returned to work or acquired new jobs but struggle to make up for losses during the pandemic due to inflation holding them back from saving. In fact, a majority of households say they’re uncomfortable with how much they have in savings — and insufficient emergency savings was the number one cited money-related issue negatively impacting mental health.

Financial stress by generation

Younger people are more likely to report being financially stressed overall. Money — including amount of debt, savings and general money management — is the number one stressor for adults ages 18 to 57, according to the 2022 “Stress in America” survey.

Generation Z (ages 18 to 25) and millennials (ages 26 to 43) in particular have a high share of respondents who are stressed about money — 82 percent and 81 percent respectively. Younger people may feel more stressed about money because they are still at the early stages of building their wealth, they’re burdened with the most student loan debt and they were hit the hardest financially by COVID-19.

The top financial stressor for those over 57 years old is the economy, which includes inflation, supply chain issues and global uncertainty. Just over half (54 percent) of baby boomers (ages 58 to 76) and 55 percent of the silent generation (ages 76 and over) say the economy is a significant source of stress. While older adults may be more comfortable with their personal finances, they may be more concerned with the future state of the world that their children and grandchildren will inherit.

Generation Top financial stressors for each Generation Share that say it’s a significant source of stress
Silent generation
(77+)
Economy 55%
Baby boomers
(58-76)
Economy 54%
Generation X
(44-57)
Money 68%
Millennials
(26-43)
Money 81%
Generation Z
(18-25)
Money 82%

Source: American Psychological Association

Financial stress by race/ethnicity

Compared to white and Asian adults, Latino and Black adults were more likely to report experiencing financial stress, the 2022 APA survey found.

Latino adults’ top source of stress is money, with 75 percent reporting it as a significant source of stress and 73 percent saying the economy is a significant source of stress. For Black adults, 67 percent are stressed by money and 65 percent by the economy.

Black and Hispanic households have been historically disadvantaged when it comes to finances. The Federal Reserve reports that 40 percent of Black adults and 30 percent of Hispanic adults are either unbanked or underbanked, compared with 12 percent of white adults. A Bankrate study also found that Black and Hispanic consumers are the hardest hit by bank fees.

Money and the economy are both equally significant financial stressors for white adults, with 63 percent saying it’s a significant source of stress for both. Among Asian adults, 60 percent say the economy is a significant source of stress, and 57 percent are stressed about money.

Race/ethnicity Top financial stressors for each race/ethnicity Share that say it’s a significant source of stress
White Money, economy (tie) 63% each
Black Money 67%
Latino Money 75%
Asian Economy 60%

Source: American Psychological Association

Financial stress by income level

The National Financial Capability Study, supported by the FINRA Foundation, surveyed households in 2021 from different income levels about financial stress. Those with annual incomes of less than $25,000 reported feeling the most financial stress, with 58 percent saying they feel stressed, 21 percent saying they feel neutral and only 20 percent saying they are not financially stressed.

Households with a yearly income of $100,000 or more had the lowest amounts of financial stress. Nearly half (45 percent) of those in this income range reported that they are not financially stressed, more than ten percentage points more than the income level below.

Income level Stressed or neutral* Not stressed
Less than $25K 79% 20%
$25-49K 74% 25%
$50-74K 69% 30%
$75-99K 67% 33%
$100K or more 54% 45%

*The study asked respondents to rate their financial stress on a scale of one to seven. A rating of four is considered neutral by the study, and ratings above four are considered stressed.

** Due to rounding and the table not factoring in those who answered they neither agreed nor disagreed with the statements, percentages may not add up to 100%.

Source: National Financial Capability Study

Financial stress by education level

The National Financial Capability Study found in 2021 that those with a bachelor’s degree or more experienced less financial stress than those who did not go to or did not complete college. While 35 percent of those with a bachelor’s degree said they are not financially stressed, only 27 percent of those who did not go to college do not have financial stress.

Highest degree obtained Stressed or neutral* Not stressed
High school or less 74% 27%
Some college 73% 27%
Bachelor’s degree 65% 35%
Post-graduate degree 59% 41%

*The study asked respondents to rate their financial stress on a scale of one to seven. A rating of four is considered neutral by the study, and ratings above four are considered stressed.

** Totals may not add up to 100% due to rounding and the table not factoring in those who indicated they did not know or preferred not to answer.

Source: National Financial Capability Study

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 are 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.
  • 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.

Frequently asked questions