Money is #1 Stressor in America

In Two Simple Equations that Lead to Financial Success, I noted a recent survey showed that almost 70% of people are either struggling (living paycheck to paycheck) or going backwards financially (going further in debt every month). That's an interesting number because it matches the following quote I found in the book Mind Over Money:

Year after year, through boom and bust, an Associated Press/AOL poll has shown that for the large majority of Americans – over 70 percent – money is the number one stressor, ranked higher than work, health, or children.

So here's the conclusion when you combine these two pieces of information together:

70% of Americans are living on the financial edge and they are stressed out about it.

Having dealt with people and their personal finance issues throughout the years, nothing really surprises me anymore. But thinking about these numbers over the past few weeks, this starts to surpass even my jaded outlook on how people handle their money. Is it really this bad? Are almost three-fourths of Americans barely making it? How did we get into this mess? We're the richest country in the world and yet most of us are living on the financial edge.

Of course I know how we got here. There are many reasons why people struggle, but the #1 reason is that they simply can't control their spending. They expect to have now what it took their parents 30 years to get. They expect to have all the "toys" that their "successful" neighbors have. Like the commercial (and song) says, "I want it all, and I want it now!" Man, that might just replace the Star Spangled Banner as our national anthem.

It must be horrible to live your life on the edge of financial collapse. Of course, there is a way out, but so many people simply seem to not have the self-control required to pull themselves away from the precipice. I feel sorry for them in a way, but mad at them in another way. After all, they have the power to help themselves, why don't they do it?

I'm not talking about the truly poor, those who need our help since they don't have the resources to help themselves. I'm talking about the average American family that makes $50k per year and spends that amount or more. Those are the people that irk me because they are in trouble they shouldn't be in.

Or maybe I'm just showing my age and becoming a grumpy old man... :-)

Comments

[Anthony]

To put things in perspective, my wife and I are relatively successful. We make $100k/year and have only student loans and mortgage as our debt.

More to the point though, the results to polls are dependant on how the polls themselves are structured.

If asked "What is your number one stressor?" and given the following options:
1. Money
2. Work
3. Health
4. Children
5. Other, Please Specify

BINGO! I would pick money as my numero uno. It doesn't stress me out that much, but is the biggest contributor of those listed...

[Money Reasons]

I blame the media, especially TV. They show people living large and showing their "bling"...

And kids grow up with their faces glued to the TV screen! TV is such a waste of life (generally...). Then you have the music industry singing about how rich they are, that doesn't help!

TV is the big subliminal teacher (buy this to be cool, etc). Kids and Adults watch more garbage TV than they do learning something useful.

[Kyle C.]

I agree with Anthony, like him we aren't exactly hurting here at my house but Money is still a big stressor. My wife and I have some opposing views and that causes stress in the home. I wouldn't rank it as my number one, I would swap 1 and 2 but it is still a big deal.

[Mike]

Anthony and Kyle are dead on. My wife and I are in the same boat. Make 100k year and our house is our only debt but money is our primary stressor.

I wonder how many of that 70% are just like us.

[Tyler]

FMF- you cantankerous curmudgeon!

Dont you know its someone else fault they are living paycheck to paycheck? Gov't policies reward this behavior.

So if 40% of home owners have no mortgage, and 68% of households 'own' a house, that means 27% of people real own their home with zero mortgage... 100%-27%= 73% ~ close to the 70% who are 'Living on the financial edge'. Is is fair to say, people who own their home outright, make up the 30% who said they are not stressed about money?

There is a big difference between being stressed about money, and being on the financial edge, living paycheck to paycheck with consumer debt.

What does a data point such as this say about the state of the economy? The likely hood of an economic recovery? The housing market? Future gov't policy? The dollar? Treasuries? Debt spreads? What's the second derivative of these types of data points? How does society function at this point? Is it even an outlier? Would this number be the same if you asked the question in the 50s, 60s, 90s etc.? What is the age factor in this number? Does the Baby Boomer Generation skew this result?

If I only had more answers!

[MonkeyMonk]

I'd guess this number is higher than 70%. I know one couple who literally has a ton of money but are incredibly frugal and as a result still stress out completely about money. They've been hardcore savers for so long that even a relatively small 1K expense causes arguments even though they have over $100K in an emergency fund and over a million in mostly-liquid savings. They literally get stressed about spending *any* money.

[kenyantykoon]

So the solution for this pickle is that we all try and make as much money as is humanly possible and then some more. so that we all sleep better :)

[Tyler]

Unfortunately, more money and more sleep are seldom correlated. Concerns and stress simply change with age and with money.

[Old Limey]

The viewpoints expressed so far primarily represent younger people that are working, raising children, concerned about their job, have some debt, and are concerned about money.

As a married couple that retired in 1992 and 1993 our concerns don't involve money whatsoever, other than disposing of it when we pass on.
Our concerns are all about staying as healthy as we possibly can and enjoying life in the slow lane to the absolute fullest possible.

Yesterday our 'adult education' hiking group of retirees went for a glorious hike in the hills that surround Silicon Valley looking for wild flowers. We found plenty, including some wild orchids. Money worries are the furthest thing from their mind, however as married couples get up into their seventies it seems that either the wife or the husband will have developed at least one of a wide selection of health issue that precludes strenuous or even less strenuous hiking, consequently married couples are rare in our group. There are also far more women than men.

So my advice is to do all the smart things that you possibly can to stay healthy during your Golden years, e.g. eliminate sodas, cigarettes & hard liquor and minimize the intake of fat, sugar and salt. Also have regular checkups and keep your weight, chloresterol, blood sugar, and blood pressure at or below the recommended levels.
They can really be Golden if your health is good, and still be pretty good as in the case of my wife where vigorus athletic activity is no longer possible but many other enjoyable activities still are.

[Holly]

Old Limey (above):

It truly is a shame when many of us scrimp and save until we finally are able to enjoy having the 'good life' only to realize that we have neglected to take care of our health. When you have chronic health issues, even the simple joys, i.e. hiking and searching for wildflowers, become that much more out-of-reach.

I am 'only' 40 but have been feeling pressure/discomfort/tightness in my chest. Only after I mentioned it to my mother did she tell me that there have been heart attacks in the family (on both sides). I really think this information should have been offered sooner, but at least I know NOW and can change some of my habits that might make the situation worse.

Thanks for the reminder to 'stop and smell the roses'!!

[Vik]

I think it's not just people that are living on the financial edge that are stressed about money. I live within my means and only debt is a mortgage, but still money is a major stress and the source is not having long term job security. If I knew I could get a minimum level of paycheck for the years I want to work, I would not worry about money. It's the price of capitalism.

[jeffinwesternwa]

average Federal income tax rates are so much lower than 20+ years ago, we took home less $$ in the 60's - early 80's! And today tech is cheaper oo tbut, the "urge to spend" seems to overwhelmhave it all NOW. We used to be happy with ONE phone, ONE, (or maybe a second used) car, One or Two Tv's w/ FREE antenna tv reception and FREE Radio too just a generation+ ago, now: cellphones galor $$, 6-8 year car payments $$, BIG houses w/ NEW stuff $$, bigger utilites $$, $100~ cable/internet bills $$, $4 cups of coffee $$,etc., the LIST goes on. The marketers have done well making Americans "think" we MUST have it all. I lived simple, paid cash for everything (even my house) and retired at age 47, just your "average multi millionaire next door"; one car, I keep it almost a decade, NO cable TV, I shop for groceries at Wal-Mart and Dollar Tree, etc., it IS possible for money to NOT stress! ....It CHOICES for 90% of people, good or bad "luck" for the rest!

[Budgeting in the Fun Stuff]

My husband's job is his #1 stressor. Money is mine even though we spend less than we earn and save quite a bit - just take a look at our monthly budget in my blog.

The thing is, being my #1 stressor isn't that big of a deal. I have a pretty stress-free lifestyle...if my husband and I have an argument, that's my big stress of the day. Otherwise, I usually have socializing or money on the mind - mostly I enjoy thinking about it but I worry a little about our future.

This is why I find surveys like this to be misleading...#1 to one person is not as big of a deal as #1 to someone else...

[C. L. Wilson]

I'm 66 and have been self-employed for nearly all my adult working life. I have also been single for nearly all that time. There isn't a day that goes by that I don't stress over money. I suspect that the majority of my peers are doing the same thing. Part of the reason is because people live so much longer today. Quite honestly, if I consider the possibility of living another 30 years (my mother is 93 and quite healthy), I have no idea how I'm going to manage. I certainly don't have anywhere near the $1MM in retirement funds that most say you need to retire on today. So, unless I win the lottery, money (or rather the lack of it) will always be a stress producer.