41% of Americans Say Money Has Destroyed Their Mental Health

2 in 3 Say Personal Finances Are Their Biggest Source of Stress

For most people we polled, nothing induces as much stress as managing money problems, according to our survey. Nearly nine in 10 survey-takers (88%) reported feeling financial stress, with 65% stating that their finances are the most stressful aspect of their life. 

Financial stress is common among all generations, but younger Americans polled say they feel the strain more than most. Millennials, born between 1981 and 1996, have weathered financial downturns and trail older generations in wealth indicators such as stock holdings and property ownership. With fewer assets to fall back on, lower wages than older professionals, and high costs for housing in urban centers, younger Americans are subject to acute financial pressures. 

With a flurry of negative headlines about layoffs and rising costs, Americans across all generations report finding it hard to see a silver lining. In our survey, nearly two-thirds of those polled (64%) reported feeling “financial fatigue” — a sense of burnout or exhaustion from dealing with finances. 

The unfortunate effect of this burnout is that many Americans avoid or neglect dealing with money problems altogether. Nearly 44% of survey-takers admitted they will ignore a financial problem until it becomes a crisis, our survey found. 

Financial stress can push people into short-sighted decisions or practices, our survey found — such as overspending and avoiding the problem altogether — creating a dangerous cycle that ratchets up their money problems. In fact, 57% admitted they procrastinate on important financial decisions, and 30% said they borrow money without a plan to repay it.

Why Nearly 9 in 10 Feel Financial Stress 

Although most survey-takers admit to some degree of financial carelessness, they attribute the bulk of their struggles to “high prices for essential goods,” according to our survey results. That source of financial stress was cited more often than any other, by 57% of our survey respondents.

The U.S. Department of Agriculture reports that food-at-home prices rose more than 11% in 2022, and some categories are still rising in cost. For example, egg prices are expected to rise another 4.8% in 2024, according to the USDA report, and beef prices are expected to rise more than 3%.

Along with high prices, Americans who took our poll cited a lack of savings (47%) and insufficient income (46%) as contributing to their financial stress. About 39% said the performance of the economy causes them stress, which comes as layoffs reach a 14-month high, particularly in government and technology sectors. 

Taking into account all these factors, 47% said that 2024 has been the most stressful year of their lives financially, according to our survey.

Americans Are Putting Money Over Mental Health — And Paying a Price

We asked survey respondents to agree or disagree with a series of statements about their mental health and finances. About 41% agreed that “my finances have destroyed my mental health,” and a majority (57%) said they feel they have to “choose between prioritizing” their finances or their mental health, according to our survey.

Overwhelmingly, financial concerns tend to win their attention. About 94% of those polled said they “sacrifice their mental health” in some way to get by financially. Some of the most common ways include “ignoring their hobbies/interests” (47%), “developing unhealthy eating habits” (42%), and “not attending social events” (41%).

Notably, these sacrifices manifest in different ways for men and women, with men more likely to work long hours (36%) and take less time off (33%), while women were more likely to develop unhealthy eating habits (47%) and skip social events (42%).

Research shows that high stress results not only in emotional unrest but tangible and harmful physical symptoms as well. About 92% of respondents in the MarketWatch Guides survey reported negative physical effects due to financial stress. Over half report losing sleep (56%) as a result of financial stress, with others reporting headaches (45%) and fluctuations in weight (38%).

Tips for Dealing With Financial Stress

Fortunately, there are ways to ease financial stress and move forward positively. Consider the following tips to deal with anxieties around money.

Improve Your Financial Literacy

Many Americans find their finances lacking, not because they’re inherently inept, but because they weren’t taught how to manage money. To improve your financial situation, consider developing your financial literacy and learning fundamentals, such as budgeting and investing.

“We do not need to be experts in financial ratios or investment analysis to have high financial well-being,” Dr. Sonya Lutter, director of financial health and wellness at Texas Tech University, told MarketWatch Guides. “We need confidence that we are on the right track for our unique goals – that are matched to our unique values – and that we have trusted sources to turn to when decisions need to be made.”

A few helpful resources you may consider are:

Protect Your Savings From Inflation

If you’re finding that the price of essential goods is getting harder to keep up with, consider saving your money in a high-yield savings account. These accounts have higher interest rates, which means your money grows at a higher rate than if you were to keep your money in a standard savings account. 

A good habit to follow is called the “50/30/20 Rule,” according to the California Department of Financial Protection and Innovation. It states that 50% of your monthly income should go to basic needs, 30% to discretionary spending, and the remaining 20% to savings.

Speak to a Trusted Loved One or Mental Health Professional

Our survey found 58% of Americans polled hide their financial stress from loved ones. If that sounds like you, consider opening up. You may find that it takes an honest conversation to release some of the financial burden you’re carrying. 

If your financial situation gets out of hand, consider speaking to a financial counselor or therapist. The National Foundation for Credit Counseling is one of many nonprofit organizations that offers assistance without hefty fees. They help you consolidate debt, offer affordable repayment programs, negotiate payment terms on your behalf, and help you get a longer payback period for your debt, thanks to partnerships with financial institutions.

Assistant Professor of Finance, Ball State University

How can poor financial literacy or lack of money management skills affect mental well-being?

Poor financial literacy and inadequate money management skills have been shown to have significant implications for individuals’ mental well-being. For instance, studies have demonstrated that individuals with higher financial literacy tend to exhibit higher cognitive function, experience less disability and enjoy better mental health.

What habits do you suggest to lessen financial stress?

Enrolling in automatic payroll deduction to a 401(k) account helps promote consistent saving behavior. It builds long-term financial security and reduces the need for month-to-month decisions about how much to save. Rewarding oneself upon reaching financial milestones can reinforce positive behaviors. These financial milestones need to be achievable goals. Avoiding comparisons with others prevents unnecessary financial stress. Focus on personal financial goals and surround yourself with supportive individuals who have a healthier mindset toward money. Prioritizing paying off non-housing mortgage-related debt is very important. It alleviates financial strain, frees up resources, and contributes to long-term financial stability.

How do economic factors like unemployment, inflation and recession influence mental health trends?

Economic factors can have profound implications for population-level mental health trends. Using national-level data from Europe and North America, Reeves, McKee, and Stuckler (2014) find that job loss, debt, and foreclosure increase the risk of suicidal thinking. As a result, governments need to realize the importance of addressing economic inequalities and promoting policies that support mental health resilience during times of economic hardship. The authors suggest interventions, ranging from upstream return-to-work programs to antidepressant prescriptions, to mitigate suicide risk during economic downturns.

Dr. Liu is a tenure-track assistant professor of finance in the Miller College of Business at Ball State University. Her research focuses on behavioral biases in individual decision-making and optimizing stock selections using unstructured data. She joined Ball State University in 2019. Prior to that, she was a quantitative investment researcher at Sumitomo Mitsui Asset Management in New York City and Tokyo. She received her Ph.D. in finance from the Scheller School of Business at  Georgia Institute of Technology in May 2017.

CFP, Director of Financial Health and Wellness, School of Financial Planning, Texas Tech University

How can poor financial literacy or lack of money management skills affect mental well-being?

More so than literacy, I have found that confidence is an important contributor to well-being. Having someone you trust and can get reliable information from is paramount to one’s well-being. Think of physical well-being — we don’t need to be an expert in nutrition to have good well-being, but we do need to know which sources of information to trust and we need to feel confident in our food selections. The same goes for financial well-being. We do not need to be experts in financial ratios or investment analysis to have high financial well-being. We need confidence that we are on the right track for our unique goals (that are matched to our unique values) and that we have trusted sources to turn to when decisions need to be made.

What habits do you suggest to lessen financial stress?

Teach yourself what it feels like to be stressed. We are socialized to give a “fine” response when someone asks how we’re doing and have seemingly lost sight of the signals at our fingertips — literally — that show us how our brain is processing information. Cold fingertips (less than 85 degrees) indicate that the body is responding to a stressor. When that happens, the brain goes into a self-protection mode and is very myopic. As soon as you notice cold hands, or cold feet, take a minute to process what about the situation is causing discomfort. It’s possible that you are trying to align someone else’s values to your goals or vice versa. Get in alignment with your unique financial situation and focus on gaining confidence in your ability to carry forward with what brings you joy, given your particular circumstances.

How do economic factors like unemployment, inflation and recessions influence mental health trends?

Transitions are hard. Any time we see changes that impact large numbers of people, we can expect stress to increase.

Dr. Lutter is a certified financial planner (CFP) and licensed marriage and family therapist. She serves as the director of financial health and wellness with Texas Tech University’s School of Financial Planning where she leads curriculum and continuing education opportunities in the areas of financial psychology, financial therapy and financial behavior. Dr. Lutter is also the owner of financial education company ENLITE, where she helps bridge the gap between mental health and financial planning.

Professor of Industrial/Organizational Psychology, Clemson University

Nearly half of Americans reported that 2024 has been the most stressful year of their lives so far. What is your perspective on such a concerning data point?

Many people are experiencing major personal demands associated with rising basic costs of living, housing, transportation, food, medical care, education costs, etc. Although data suggest that wages are rising faster than inflation, it seems to me that many people are not feeling that in terms of their day-to-day lives. At the same time, there are many important socio-political trends that I think increase people’s general sense of insecurity, such as the 2024 U.S. presidential election and political conflict more generally – the Russian invasion of Ukraine, the Palestine-Israel conflict – the aftermath of COVID-19 and technical change on the workplace. To me, these problems are especially concerning for younger workers who enter adulthood into a world that is vastly more uncertain than it was for their parents or grandparents.

What are the most common mental health issues that can result from financial stress?

Our research shows that financial stress is related to common mental health outcomes, such as anxiety and depression as well as disengagement at work, family-related concerns, and stress-related physical health symptoms.

What are some effective coping strategies for individuals dealing with mental stress and anxiety caused by financial strain?

It is important to recognize that financial strain should not be viewed as something that workers need to learn to cope with. Business and governmental leaders should be finding ways to increase compensation and help workers manage financial demands through social and organizational policy decisions. However, we also know that financial literacy is generally lower-than-desirable for many Americans, and it is important for workers to learn to effectively manage their finances before they start experiencing financial strain, if possible. It also is important to recognize that when experiencing financial strain, people need to avoid coping behaviors that might further increase their financial strain such as substance abuse, impulsive purchase decisions, or efforts to avoid thinking about the long-term costs of financial decisions.

Dr. Sinclair is an industrial/organizational psychology professor, having previously held faculty positions at Portland State University (2000-2008) and the University of Tulsa (1995-1999). Dr. Sinclair also serves as the graduate program coordinator for the Clemson Department of Psychology’s Ph.D. and M.S. programs. He is a founding member and past president of the Society for Occupational Health Psychology and a fellow of the Society for Industrial-Organizational Psychology and the American Psychological Association. Dr. Sinclair is the founding editor-in-chief of Occupational Health Science as well as an editorial board member of the Journal of Business and Psychology, Journal of Occupational Health Psychology and Group and Organization Management.

Methodology

The MarketWatch Guides team surveyed 2,000 Americans using Pollfish, a third-party market research and survey platform, to better understand how finances are impacting Americans’ stress and mental health. We collected survey data for this report from April 17-18, 2024.

We weighted responses to align with population demographics across age, gender, and income status to be representative of all U.S. adults (aged 18+). The margin of error is +/- 3% with 95% confidence.

Questions about our study? Please contact the team here.