Having enough money to easily pay for regular expenses and at the same time finance future goals gives people a sense of security and positivity. So it is a safe assumption that insufficient money has the opposite effect. Now the data proves it.
A new Money and Mental Health report, developed by Bankrate and Psych Central in April 2022, found that a significant proportion of Americans are experiencing financial hardship. Of those surveyed, 42 percent cited money concerns that have a negative impact on their mental health
Everything from managing debts to managing money was linked to a deteriorating psychological well-being, which led to such outcomes as anxiety, stress, worrying thoughts, loss of sleep and depression.
Money and Mental Health Survey: Key Finds
The survey revealed many striking statistics, including:
- Women are more likely to be negatively affected than men. Women are significantly more likely to cite money as a negative impact on their mental health, with 46 percent choosing it compared to 38 percent of men.
- Millennials suffer the most. The survey showed that 48 percent of millennials (26 to 41-year-olds) are psychologically affected by financial problems, followed by 46 percent of Generation X (42 to 57-year-olds). Generation Z (18 to 25-year-olds), however, is not far behind, with money that reportedly causes mental anxiety for 40 percent of this group.
- High-income earners experience less emotional suffering than low-income earners. Only 30 percent of people with an annual income of at least $ 100,000 cited money as a negative factor for their mental health. That is compared to 48 percent of those with household incomes of less than $ 50,000.
- Worrying about money is a frequent occurrence. Among those who cited money as a negative impact on their mental health, 28 percent said they worry about it daily. These daily worries were more often men (32 percent compared to 24 percent of women), with a high school diploma or less (32 percent compared to 25 percent of those with any college or more) and were in younger age groups (34 percent of Gen. Z and 36 percent of millennials compared to 27 percent of Gen X and 17 percent of baby boomers).
The survey of 2,457 adults was conducted online by YouGov between April 6 and 8, 2022. The figures have been weighted and are representative of all American adults (18+).
The connection between negative financial experiences and emotions
One of the most common and pressing concerns people have is the ability to meet a significant financial expense. Having money hidden from the unexpected is a strong emotional safety net. Consequently, it is not much of a surprise that the survey also found that insufficient emergency savings emerged as the main factor, with 57 percent of those concerned about money citing it as a specific issue that has a negative impact on their mental health; this is especially true among Gen Xers (60 percent), millennials (59 percent) and women (60 percent).
“When it comes to the sources of our collective and individual mental distress, it turns out that money is at the top of the list,” said Mark Hamrick, senior economic analyst, Washington Bureau Chief for Bankrate. “Again, the failure to save for emergencies is a major concern.”
And then there is stress, a word that has become ubiquitous among Americans of all ages. When the survey asked about feelings and emotions, the respondents who said that money negatively affects their mental health most often reported that they were “stressed” (70 percent).
But it is only an expression of the emotions associated with money. Other common reactions (all more common among women and Generation Xers) include being anxious (71 percent of both women and Generation X), anxious (61 percent and 62 percent, respectively), overwhelmed (55 percent each) and insecure (44 percent and 46 percent respective).
“These survey results are sober because financial stress affects us all, regardless of age, gender or race,” said Faye McCray, editor-in-chief of Psych Central, a Healthline Media company. “We often equate our financial situation with our dignity and this can prevent us from seeking support when anxiety and worry become too overwhelming.”
– Faye McCray,Editor-in-Chief of Psych Central, a Healthline Media company
Triggers financial events and mental health
Negative feelings about money often come from a certain type of activity. However, not all are extraordinary events. According to Hamrick, just talking about money can generate negative emotions, especially for younger Americans.
“And among adults who say that money can have a negative impact on their mental health, about half (49 percent) say looking at their bank accounts is a trigger,” says Hamrick. “This indicates that we as a society must do a better job with experiences and conversations about money.”
There are lots of other situations that also create negative emotions. Having to come up with enough money to pay for unexpected expenses leads the list, quoted by 69 percent of those who worry about money, while 52 percent said that is when bills will fall due.
The other events that those who are negatively affected by money said to evoke negative emotions are, in order from most to least common:
- Looking at their bank accounts (49 percent)
- Pay a bill (41 percent)
- Make a purchase (34 percent)
- Having to talk about money (32 percent)
- Get paid (21 percent)
- Looking at their investment accounts (16 percent)
- Looking at social media (11 percent)
Given that these activities are part of everyday life, it is important to find healthy ways to deal with them. This includes seeking help when needed.
“It’s important to give ourselves grace and take advantage of resources to prioritize our mental health, especially when navigating difficult economic times,” says McCray.
– Faye McCray,Editor-in-Chief of Psych Central, a Healthline Media company
What happens next: Reduces inflation concerns with saving
Before inflation began to soar in January 2022, the US economy seemed to be on a positive track. Now the dramatic increase in the cost of important goods and services is increasing to the feeling of personal financial insecurity.
“Lately, the bad news about inflation has almost ignored the positive effects of low unemployment, and that’s understandable,” says Hamrick. “Until the economy is considered on a more constructive path, it is likely that money and personal finances will be a significant source of stress for many Americans.”
To compensate for so many of the problems that money is about, especially when the prices of necessities rise, it can help to do everything to save money. Not being able to cover the cost of a crisis was, after all, stated as the biggest problem in the survey.
“If we can effectively prioritize urgent savings along with other financial goals, it can provide a two-way dividend of both financial and mental well-being,” says Hamrick.
Financial insecurity can clearly have a profound impact on our mental health, whether we are struggling to meet immediate needs or just trying to have a difficult conversation about money. It is important to give yourself grace and ask for help if you need it. Commit to small steps to get a greater sense of financial control – refine a budget, identify ways to earn more, reduce debt with high interest rates and even set aside some money for the future.
Bankrate.com commissioned YouGov Plc to conduct the survey. All figures, unless otherwise stated, are from YouGov Plc. The total sample size was 2,457 adults, including 1,045 who said that money has a negative impact on their mental health. Field work was carried out between 6 and 8 April 2022. The survey was conducted online and meets rigorous quality standards. It used a non-probability-based sample with quotas in advance during the collection and then a weighting scheme on the back designed and proven to give nationally representative results.