April is financial literacy month and a great time to focus on addressing and improving your relationship with money. Unresolved fears around money and potential negative outcomes are common barriers to dealing directly with financial issues. The good news is that you are not alone. Eighty five percent of Americans report feeling some kind of financial anxiety, with a quarter of people reporting that they worry about money on a daily basis. Facing these fears head on—and realizing that many others share similar concerns—is the first step to moving past these roadblocks and improving your overall relationship to money.
Lack of short term savings
Thirty percent of American are afraid they don’t have enough savings to cover unexpected expenses and emergencies. Indeed, 45% of people report not having any money in their savings accounts and 24% have less then $1,000. Having an unplanned medical expense is another ongoing concern for many Americans, with 34% reporting that they worry about an illness or injury bringing on large medical bills and a potential inability to work. Nearly 1 in 5 Americans is concerned with their ability to afford healthcare.
If you are concerned about not having enough money for retirement you are not alone. Nearly 20% of Americans reported this was the financial concern that worries them the most. This problem tends to increase with age, with people in the 55-64 age range being the most concerned. A full 22% of Americans fear they will never be able to retire and will always have to work in order to maintain their standard of living. Twenty percent are worried that they will become a burden to their families if they are unable to work and run out of savings. Of Americans who have already retired, 21% are concerned that they will outlive their savings. Only 18% of Americans are very confident that they are saving enough money for retirement.
Finances and Demographics
Single people are much more likely than their married counterparts to report feeling ongoing financial stress. Over half of single women (55%) and almost half of single men (49%) report feeling unhappy with their financial situation, compared to one third of married women and even fewer married men. These statistics are possibly skewed because many married couples delegate one person to be in charge of financial matters and so the other partner may be less aware of the true financial situation the couple is in. Single people are also less likely to have a financial advisor or have met with an expert on retirement planning.
Gender also plays a role in our biggest financial fears. Women tend to be more worried about always having to live paycheck to paycheck (25%), while only 17% of men have this same concern. Experts speculate that this may be partly due to the fact that women are often more aware of the day to day household expenses, while men are more able to be in denial around short term financial problems. Men were more likely to fear losing money in the stock market (14%) then women (9%). Both genders were more likely to be equally concerned about living in debt forever, job loss and low credit scores.
Concerns that are less common but still significant include: Losing my job (17%), Identity theft (16%), extended unemployment (15%), death/loss of primary breadwinner (14%), having poor credit (14%), having to claim bankruptcy (6%) and becoming a victim of a financial scap (6%). Another survey showed similar findings and also found that 18% of people are afraid of being in debt forever, 11% are afraid of losing all their money in the stock market and 8% are afraid they will never be able to buy a home.
Addressing financial fears is not just a matter of dollars and cents. Financial issues have the power to impact all areas of life. A majority of Americans report that financial stress is negatively impacting their health, happiness, moods and home life. In our April Financial Literacy series we will explore creative ways to address these concerns as well as nuts and bolts ways to get control of your finances.