Eighty-five percent of Americans are financially anxious, and 36% say it has gotten worse in the past three years, according to the 2016 Northwestern Mutual Planning & Progress Study. Only 14% say their feelings of financial anxiety have improved, and nearly one-third, 28%, say they worry about their finances every day.
People’s sense of financial unease is impacting many apsects of their lives.
Sixty-seven percent say it is negatively affecting their health, 70% say their happiness,
70% their moods, 69% their ability to pursue passions, 61% their home life, 51%
their social life and 41% their career.
“Clearly, the impact of financial anxiety in America today runs extremely deep,” says Rebekah Barsch, vice president of planning and sales at Northwestern Mutual. “This research provides a unique window both on the sheer number of people who say they feel anxiety and the effect that financial uncertainty can have on everything, from day-to-day moods to overall health and happiness.”
Americans’ two biggest financial fears are facing an unplanned financial emergency (38%) and incurring an unplanned medical expense due to an illness (34%). These outpaced outliving their retirement savings (21%), losing their job (17%) or being unemployed for an extended period of time (15%).
When asked what the source of their financial
concerns are, 55% said unexpected expenses, followed by saving for retirement
(29%), health care costs (27%), mortgage or rent (25%), credit card debt (25%)
and student loan debt (13%).
“There’s the sense that people are just staying afloat, that they’re meeting their most immediate financial needs but that they are worried about what they can’t see or don’t expect,” Barsch says. “They fear the unknown. They don’t know how to plan for the unplanned, and they worry that if something unexpected happens, it could have deep and lasting consequences.”
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Conversely, Northwestern Mutual asked people what repercussions on their lives financial security would have. Eighty percent said it would positively impact their health, 84% said their happiness, 81% their moods, 81% their ability to pursue passions, 79% their home life, 74% their social life and 66% their career.
Asked what they would do differently if their financial
situation improved, few people pointed to changes. Only 9% said they would
change careers, 12% said they would purchase a luxury item like a boat, 15%
would stop working, 29% would pursue a passion, 29% would work on their
personal health, 32% would leave money to loved ones, and 34% would purchase a
Asked what they think are the benefits of financial security, 52% said “peace of mind that I never have to worry about day-to-day expenses,” 22% said the “flexibility to live a desired lifestyle,” and 8% said “freedom to pursue my dreams.”
Harris Poll surveyed 2,646 adults between February 1 and February 10 for Northwestern Mutual. The 2016 Northwestern Mutual Planning & Progress study can be downloaded here.