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. 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 an April 2023 Bankrate survey, 52 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:

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Bankrate surveyed U.S. adults in April 2023 on how money affects their mental health. Some of the survey’s findings include:

  • Most (82 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 insufficient emergency savings, with 56 percent of respondents in a Bankrate survey citing it as having a major negative impact on their mental health.
  • Women are more likely to experience financial stress than men — 56 percent of women said money has a negative effect on their mental health, compared to 47 percent of men.
  • Of those who said money is a stressor, 29 percent said they worry about it daily.
  • Low-income households are more likely to say money has a negative impact on their mental health — 59 percent of those with household incomes of less than $50,000 said they worry about it. This is an increase of 11 percent from 2022.
  • Middle generations are more stressed about money over younger and older generations, with 60 percent of Generation X (ages 43 to 58) and 55 percent of millennials (ages 27 to 42) 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.

In October 2022, the APA reported the highest number of people experiencing money-related stress since 2015 — 66 percent of respondents said money is a significant source of stress.

Social media has made many people feel worse about their finances, a Bankrate poll from July 2022 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 an annual rate 9.1 percent in June 2022, the highest rate in 40 years. The inflation rate has since trended downward, landing at 4 percent year-over-year for May 2023, 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. In Bankrate’s survey on money and mental health, 82 percent among those who said money negatively affected their mental health cited the economy as the primary cause. Among those economic factors, specific reasons cited are:

  • Inflation/rising prices (68 percent)
  • Rising interest rates (31 percent)
  • Not having a stable income/job security (29 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 lacking control. 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 our control can seriously disrupt our lives, especially when we don’t have emergency funds to fall back on. And according to Bankrate’s 2022 emergency savings report, almost half (44 percent) of consumers have either less savings or none compared to a year ago.

It can be difficult to build an emergency fund when budgets are 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 18 to 26 ) and baby boomer (ages 59 to 77) counterparts.

Gen X (ages 43 to 58) had the highest share saying money negatively impacts their mental health, followed by millennials (ages 27 to 42) — 60 percent and 55 percent respectively. Meanwhile, 52 percent of Gen Zers and 45 percent of baby boomers said the same.

Last year’s findings indicated that younger generations were the most stressed, but that title has since shifted to middle generations. One reason could be that Gen Z was the hardest hit by Covid-19, according to a Bankrate poll from February 2022, the effects of which have since diminished.

Middle generations may also 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 59-77) Inflation/rising prices 79%
Gen X (43-58) Inflation/rising prices 68%
Millennials (27-42) Inflation/rising prices 64%
Gen Z (18-26) Paying for everyday expenses 54%

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 crime, according to the APA data — economic factors were most cited as a financial stressor for white individuals.

Bankrate’s financial wellness survey found that 70 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 68 percent respectively.

Race/ethnicity Top financial stressors for each race/ethnicity Share that say it’s a stressor
White Inflation/rising prices 70%
Black Inflation/rising prices & paying for everyday expenses (tie) 56%
Hispanic Inflation/rising prices 68%
Other Inflation/rising prices & paying for everyday expenses (tie) 63%

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 59 percent saying they feel stressed by money, compared with 45 percent of those making $100,000 or more, according to Bankrate data.

Lower-income earners tend to stress about money more frequently, too. More than a third (35 percent) of those making under $50,000 who are financially stressed said they worry about money daily, while only 23 percent of those making $100,000 or more said the same.  1

Income level Top financial stressors for each income level Share that say it’s a financial stressor
Under $50,000 Inflation/rising prices 72%
$50,000-$79,999 Inflation/rising prices 64%
$80,000-$99,999 Inflation/rising prices & Not enough emergency savings 66%
$100,000 or more Inflation/rising prices 60%

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. 71 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.

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 71%
4 year Inflation/rising prices 67%
Post Grad Inflation/rising prices 65%

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. 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.

Frequently asked questions

  • According to Bankrate’s financial wellness survey, 52 percent of adults say that money negatively impacts their mental health, including by causing stress.
  • Finances play a significant role in our daily lives, from being able to afford food and housing to achieving our future goals. Financial stress can come from a number of related factors, including paying bills, managing debt and having enough savings.
  • Stress can put a strain on relationships, general mood and physical health. According to the American Psychological Association, stress is not just a mental state — it affects your body, too, from causing severe headaches to increasing your risk of heart disease. See the full breakdown of the effects of stress on the body.
  • Five ways to help you deal with financial stress are:

    1. Take financial decisions one at a time.
    2. Prioritize essential bill payments.
    3. Track your spending with a budget.
    4. Keep saving each month, bit by bit.
    5. Reach out to friends and family or a financial advisor for support.