Money is the leading cause of stress in America, and boy, are we stressed out these days! According to a study published in the Journal of Psychiatric Services, stress, anxiety, and depression were at all-time highs in 2017. 39% of respondents reported being more stressed than a year ago, while only 19% reported being less stressed. Financial worries (a significant source of stress for 64% of adults) rank higher than work (60%), family responsibilities (47%), and health concerns (46%).
If you’re in HR or running a business, I hope I have your attention because employees stressed due to financial worries are not good for your business.
Millennials seem to be most affected by financially induced stress. According to a study by Northwestern Mutual, an estimated 28% of millennials are experiencing so much stress that it’s affecting their job performance. That’s twice the rate of the general population.
Furthermore, 23% of Millennials say that financial stress makes them physically ill on a weekly or monthly basis compared to just 12% of workers among all age groups.
In his Market Watch article, Jacob Passy states that Americans are plagued by financial anxiety — and it’s only getting worse- provides thoughtful commentary on what’s driving financial anxiety and how financially driven stress affects demographic groups – gender, age, and race – differently. “The vast majority of respondents believe a person’s mental health impacts their physical health (86%, up from 80% in 2017).”
There are no magic bullets to relieve financial anxiety and stress, but there are some tried and true steps to take.
- First on every advice list is to create a budget and stick to it. Unfortunately, studies show that 2/3 of American adults don’t have a budget, and many of us sometimes fall into the trap of spending more than we make. Consumers are not like the US government; we can’t sell debt or print more money in order to spend more than we make.
- Put away an emergency fund. Of course, this may be easier said than done, but start small. Even a few dollars a week will add up. 69% of U.S. adults have less than $1,000 in savings, while 34% have no savings at all. What happens if you’re in an auto accident or have a health emergency and you have no savings? Talk about stress!
Make savings a way of life. Many financial experts say to pay yourself first. In other words, put money into a savings or investment account before you see how much you have for other purposes. Many banks will let you set up an automatic monthly transfer from your checking to your savings account. That’s a great way to force yourself to save.
Eliminate debt. Some people dig such a deep hold of debt between student loans, car loans, mortgages, and credit card debt that they may never get out. Getting out of debt, especially credit card debt, can be very therapeutic, not to mention financially rewarding. According to Meghan Murphy, Vice President of Thought Leadership at Fidelity Investments, Fidelity’s research shows that paying off debt positively impacts a person’s overall well-being. Bigger even than exercise. “If you want to reduce stress, start by paying down your debt.” - Meghan Murphy, Fidelity Investments
And, maybe one of the most overlooked opportunities for many is to tap into the resources of your EAP. Many EAPs include financial consulting and financial coaching as a free service. Unfortunately, employees often miss this because they aren’t aware that they even have the benefit of free financial advice and coaching. Employers can help by working with their EAP to market these services better. Ask your EAP for marketing materials to explain the services offered. Your EAP should be willing to set up lunch and learns, webinars, and other employee meetings to raise employee awareness.
Financial worries don’t have to be deterrents to productivity at your company. If your EAP does not offer services like financial coaching, call Espyr. With a national network of financial professionals and financial coaches, we can help.
