People, Money, and Stress

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Financial security emerged as the most important attribute of a positive outlook on life, according to new research released today by Northwestern Mutual. An overwhelming 9 in 10 Americans (87%) agree that nothing makes them happier or more confident than feeling like their finances are in order.

“The formula is simple,” said Rebekah Barsch, vice president of planning at Northwestern Mutual. “Financial security creates options, and options empower people to curate the life they want — both in the present and the future.”

These are the latest findings from the 2018 Planning & Progress Study, an annual research project commissioned by Northwestern Mutual that explores Americans’ attitudes and behaviors toward money, financial decision making, and the broader landscape issues impacting people’s long-term financial security. The first set of data around retirement savings was released in May.

Money Mayhem

While nearly seven in 10 Americans (68%) said they feel happy about their financial situation at least sometimes, a good portion also consistently experience a range of negative emotions such as:

  • Anxiety (54%) (25% “all the time” or “often”)
  • Insecurity (52%) (24% “all the time” or “often”)
  • Fear (48%)

Money also emerged as the dominant source of stress (44%), dramatically outpacing personal relationships (25%) and work (18%). This is not surprising, considering that the following are just some of the financial pressures causing at least four in 10 Americans to experience “high” or “moderate” levels of anxiety:

  • Rising cost of healthcare: 59%
  • Unplanned financial emergency: 55%
  • Unplanned health emergency: 53%
  • Income: 48%
  • Level of savings: 48%
  • Debt: 42%
  • Planning for retirement: 41% — up from 37% in 2017

“What do the top three sources of financial anxiety have in common?” continued Barsch. “They’re unpredictable, and uncertainty tends to make people uncomfortable. The good news is, with financial matters, there are typically opportunities to make unexpected events feel less daunting by being proactive about planning.”

The psychological and lifestyle implications of financial anxiety are sobering. More than a quarter of Americans (28%) said that financial anxiety makes them feel depressed at least monthly, with 17% suffering depression as often as weekly, daily, and even hourly. Other effects people experience at least a few times a year include:

  • Impact on relationships with spouses/partners: 41%. In fact, 1 in 5 (19%) Americans said they have financial disagreements with their significant other at least monthly
  • Missing out on social events: 45%
  • Issues with family members other than partners/spouses: 38%

“Life is meant to be spent living not worrying,” noted Barsch. “A financial strategy can play an important role in easing financial anxiety.”

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