Want to hear some good news about your financial anxiety? You’re not alone.
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Inflation and job security concerns topped the 2022 Polygenius Financial Anxiety survey. The study showed that 64% of Americans are feeling anxious about their finances over the next year. 29% said they feel more anxious than they did last year. 23% said they’re just as anxious. Only 13% said they were less anxious than in 2021.
Thankfully, most people have options available to help manage those concerns. Here are the biggest sources of financial anxiety and how to cope with them.
Will I lose my job?
Younger adults aged 18-34 said job and career concerns are the biggest factor contributing to their financial anxiety, more than any other age group. Most young people haven’t been through a financial downturn and they’re anxious about the future. They’re also quitting their jobs in record numbers, which you might think is a strange thing to do when you’re worried about money.
Most career experts say it is a good idea to look for another job before quitting the one you’re in. Update your resume with recent skills and experience you’ve gained in your current role, and reach out to contacts in your industry. Another option? Look outside your industry when looking for new opportunities; many skills translate across industries.
Will inflation break my budget?
Consumer prices rose higher globally in 2021 than at any time since 1982. For those on fixed incomes, particularly in retirement, it can mean hard choices like delaying medical care or eating unhealthily.
Financial experts say the most important thing is to understand where your money is going. That means making a budget so you can look more carefully at where you could cut back. If your financial anxiety is rising, then getting control over some costs can be a big factor in paring it back. For those investing for retirement, most financial advisors recommend staying the course with a long-term diversified strategy. Over the long term, stocks have done a good job fending off inflation.
Will COVID-19 impact my finances?
The global pandemic caused huge disruption of the workplace and across most industries, so it’s not surprising to find 14% of Americans say it is the top factor contributing to their financial anxiety.
Businesses have adapted to changing conditions by hiring fewer staff or relying on freelance and contract workers more often. If you can’t work remotely, it’s been a brutal two years. The biggest realization from the pandemic is that the unexpected can happen.
Financial experts recommend building up an emergency fund and doing some life insurance planning, as well as writing a will, so that you can face the future with more confidence.
Will I be able to cover my medical expenses?
As they age, most Americans worry more about covering medical expenses. The survey found they’re the number two factor for financial anxiety for Americans 55 and over. COVID-19 also made many people pause decisions about moving into assisted living centers and retirement communities.
Unlike Australia, the U.S. does not have universal healthcare. Private health insurance costs hundreds of dollars a month, and medical debt is one of the leading causes of bankruptcy in the U.S.
Will I get stuck in debt?
The average American has $90,460 in consumer debt, including credit cards, personal loans, mortgages, and student debt. (This is nearly twice the average debt in Australia, where the average personal debt is $46,000.)
Working parents are paying more than ever for childcare or they’re taking time off without pay to do it. Financial experts say the best thing you can do to pay off debt is get paid more but if that were easy, we’d all have done it by now. The other thing you can do is budget.
The findings of this study underscore how precarious most Americans find their financial situations in this precarious economy. And the anxiety about inflation across income strata, age, and gender shows that outside economic forces — and their influence on personal budgets and spending power — are especially anxiety inducing.
Experts agree that we do have some power to control the things that are making us anxious when it comes to our money, and that usually means finding a way to earn more of it, or spend less.
By Logan Sachon
BIO:
Logan Sachon is the senior managing editor of research at Policygenius, where she oversees our insurance and financial data studies and surveys. Previously, she co-founded The Billfold, a groundbreaking personal finance site for millennials named one of TIME’s 25 best blogs of the year. As a journalist, her work has appeared in The Guardian, Business Insider, CNN Money, BuzzFeed, Money Under 30, VICE, New York Magazine, and elsewhere.