Feeling stressed about budgeting, finances, and the perpetual talk surrounding inflation and an upcoming recession is not novel. Financial stress—including the mental health impact of managing a tight budget amid an uncertain economic climate—is experienced by the vast majority of Americans, although the coping responses and priorities differ based on generation, a new survey finds.
In a financial wellness survey released Monday conducted by Robinhood, a financial services company that surveyed 2,200 Americans in August aged 18 to 57, 84% reported feeling stressed about money. High-income earners report being financially stressed (80%) only marginally less than low-income Americans (85%). These feelings can worsen as the holidays approach, which is a major financial burden for over a third of Americans compared to other times of year. Younger generations in particular fear for their future.
The financial stress centered around planning for the future arises in almost half of Gen Z (45%) and millennials (41%), and buying a house and car independently financially stress out almost half of Gen Z in particular. Over a third of both Gen Z and millennials report not contributing to their 401K due to the economic climate, and nearly one-third of millennials say they have a drink in response to this stress.
Still, people have largely taken action to combat these feelings directly. Almost half of those surveyed from all generations have created or edited a budget to combat their overwhelm—and 81% all those surveyed report eating out less to manage inflation.
It’s common to spend on happiness
Despite the almost universal feelings of financial stress, almost half of Americans are not letting one spending influencer go by the wayside: their happiness.
Forty-nine percent of Americans frequently or sometimes get into financial trouble by spending on their happiness, with those finding the most joy from spending on shopping or hobbies. Spending to improve happiness resonates across generations, although it’s more common for Gen Z (64%) and millennials (68%) than Gen X (57%).
Spending on so-called happiness should not be something we eliminate altogether, says Amanda Clayman, a psychotherapist specializing in financial therapy, in Robinhood’s press release. Incorporating the things you love, and even the hobby that may help you cope with that financial stress, into your budget is a way to control the spending, she says. Not treating yourself to the potentially small expense that may improve your overall happiness and well-being in the long run is not the answer, Dr. Dennis P. Stolle, the senior director of applied psychology at the American Psychological Association, told Fortune.
Set behavioral goals
And instead of coping in potentially harmful ways to drown the stress, take action by managing your budget and improving your financial literacy. Feeling the uncertain stress about money is common, and ways to combat it can start with setting “behavioral goals,” Clayman says in the release, including challenging yourself to read about personal finance routinely in your week or starting to invest small amounts of money at a time as a way to take control of your situation.
Leaning on a trusted individual can also help build that confidence, she says. The survey reveals that people would feel comfortable seeking help: 64% of millennials say they would go to a financial therapist if they had the means.
“Some of us react to situations by rebelling and refusing to acknowledge restraints, perhaps by spending beyond our means, but others use constraints as an impetus to act,” Clayman says in the release.
Acknowledging your feelings is the first step, which can help turn fear into action, knowing that you’re accompanied by countless others who have similar stressors.
