70% of Americans Are Facing Money Woes and Here Are 3 Reasons Why
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No matter how little — or how much — money you make, you might be feeling financially stressed. This position comes due to a survey from CNBC, conducted in partnership with Momentive.
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Financial stress has become a significant part of life in this decade, with 70% of Americans saying they feel “very or somewhat stressed” about their personal finances right now. More than half (52%) said their financial stress has increased since before March 2020 — when the COVID-19 pandemic caused job loss, economic uncertainty and supply chain woes.
“People are worried that the money they’ve saved won’t last and are worried they’re going to have to lean more on their credit cards and other sources of debt just to get by,” Bruce McClary, a senior vice president at the National Foundation for Credit Counseling, told CNBC.
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Financial Stress Crosses All Economic Strata
What’s worse, financial stress impacts people across income levels, according to the survey. Of those earning less than $50,000, which includes Americans at poverty level, 55% report more financial stress than pre-pandemic. Meanwhile, 56% of those earning between $50,000 and $100,000 are stressed.
Indicating that the high costs of inflation even affect six-figure earners, 46% of households making $100,000 a year or more report feeling stressed. The reasons?
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No. 1: Inflation Is Cooling, But Is it Enough?
Although inflation is cooling slowly thanks to efforts by the U.S. Federal Reserve, prices remain elevated. The March 2024 consumer price index report revealed a 0.4% increase, month-over-month. The report showed an alarming 3.5% increase in March, largely driven by increases in shelter and energy.
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Inflation makes it harder for Americans to afford gas or groceries — or to save for long-term purchases such as a house. It’s no wonder 60% of survey respondents cited higher costs as a major cause of financial stress.
No. 2: High Interest Rates Persist
The Fed is likely to keep interest rates stable, with no cuts in the prime rate, until inflation reaches the target 2%. Meanwhile, elevated interest rates make it harder to afford a mortgage or car loan — or to pay down high-interest credit card debt. More than one-third of survey respondents (36%) said they were stressed about interest rates.
No. 3: A Lack of Savings Compounds the Issue
More than one-quarter (27%) of Americans have less than $1,000 in savings, according to a separate report from YouGov, while 12% have no savings in the bank at all.
Roughly 18% had more than $1,000 but less than $10,000 saved, which might be enough to cover an emergency car repair, but is probably not enough to sustain a family through long-term job loss. According to the CNBC survey, 35% of Americans are stressed about their lack of savings.
The Bottom Line On the Economy
When it comes to personal finance, there are many factors we can’t control, including the economy, inflation, and interest rates. By facing your financial situation head-on and creating a budget, you can regain some sense of control, which could reduce your stress surrounding finances.
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This article originally appeared on GOBankingRates.com: 70% of Americans Are Facing Money Woes and Here Are 3 Reasons Why
