People everywhere say that the economy is improving. However, just because certain numbers indicate that things are getting financially better overall doesn’t mean that financial problems are resolving. In fact, there are some serious financial concerns.
The 2018 National Financial Capability Study indicates that “for the majority of Americans, financial capability, stability, and confidence are no longer improving in step with the economy.” So, the economy is getting better, but how much that improves individual’s financial lives has leveled off.
Here are the top four financial concerns people cite despite the improving economy:
1. Financial Concerns Related to Privilege
All demographic groups have improved financially in terms of their ability to cover their monthly expenses. In that sense, we see improvement in the economy. However, if you dig deeper into those demographics, it becomes clear that some segments of the population are doing much better than others.
People whose improvements haven’t been as great include:
- Those with lower incomes
- Younger Americans
So, young African Americans in a low income bracket have reason for significant financial concerns as the gap keeps widening despite an improving economy.
2. Financial Concerns Continue to Cause Stress
Even with improvements in the economy, most people still have financial concerns. Those concerns lead to stress and anxiety. In turn, those conditions have the potential to lead to a great number of problems including physical health issues. Here are some important findings about financial concerns as related to stress:
- Thinking about finances makes more than half of people anxious. Discussing finances is stressful for 44% of people.
- More than 60% of single women experience anxiety about their finances. More than half get stressed out discussing those issues. The numbers are about ten percent lower respectively for single men.
- Younger people are most likely to experience high levels of stress and anxiety. In fact, nearly 2/3 of those surveyed between ages 18-34 say that financial concerns are stressful.
Therefore, if you are a single woman under age 34 then you’re at great risk of developing stress/anxiety due to your financial concerns.
3. Student Loans Are Among Biggest Financial Concern
It seems like a lot of that stress and anxiety is a direct result of problems with student loans. 48% of Americans with student loan debt are concerned that they will not be able to ever repay those debts. 47% wish that they had chosen less expensive colleges so that they wouldn’t have so much debt hanging over them. And despite the improving economy, more than four in ten student loan borrowers made a late payment within the last twelve months.
4. People Aren’t Saving Money
Economic improvements have made it possible for a lot more people to make ends meet. However, that doesn’t mean that we’re able to save. More than one third of those surveyed spend about as much as they earn. In other words, they live paycheck to paycheck and can’t set aside money for emergencies, let alone for retirement. Even worse, nearly one in five people are spending more than their income. Not only are they not saving; they’re still accruing debt.
- 46% of people do not have enough emergency funds to last three months.
- 16% of people have withdrawn money early from their retirement accounts.
- More than half of those surveyed have financial concerns about running out of money in retirement.
- Nearly 20% of people have been late on their mortgage payments.
- Nearly one quarter of people have unpaid medical bills.
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