Significant Personal Issues

Money has impact on far more than just people’s bank accounts – it permeates most areas of their lives. It affects central areas of our happiness and well-being: relationships, health, lifespan, lifestyle, and career. Financial problems often have significant effects in many areas of people’s lives and overall life experiences.

The stress of having too much debt or being financially insecure can have a tremendous impact on an individual’s emotional and physical health. Financial insecurity may include constant reminders of outstanding debt, or more extreme situations such as unknown circumstances regarding your next paycheck, keeping a roof over your head, or feeding yourself and your family.

According to the American Psychological Association, 64 percent of Americans report being significantly stressed about money. Two of the most common effects of financial stress are anxiety and depression. While on the surface these may appear to be emotional health issues, chronic mental issues typically lead to the debilitation of physical health – such as high blood pressure, ulcers, eating disorders, and substance abuse – all of which can result in life-threatening conditions. Adding to the downward spiral, health issues cost money for treatment and prescription drugs, potentially a lot of money for those who are under insured; serving to intensify the financial hardship.

Research, Statistics & Quotes

For the majority of Americans (64 percent), money is a somewhat or very significant source of stress, but especially for parents of children below the age of 18 and younger adults (77 percent of parents, 75 percent of Millennials, ages 18 to 35, and 76 percent of Gen Xers, ages 36 to 49).
American Psychological Association

Individuals who have experienced more major financial stressors report greater levels of psychological distress and lower levels of psychological well-being. Mediation analyses also suggested that financial stress may indirectly affect inflammatory activity through decreases in psychological well-being.
Psychosomatic Medicine

Seven out of ten American workers say financial worry is their most common cause of stress.
Consumer Financial Protection Bureau

83% of HR professionals say financial stress in employees negatively impacted work performance.

Stress not only affects a person’s mental health. It also takes a physical toll on the body. Inflammatory hormones are released when a person is stressed. This increases cardiovascular and cancer risk, among other issues. As a result, the authors pointed out, stress results in “accidents, absenteeism, employee turnover, diminished productivity, and direct medical, legal, and insurance costs” that cost the United States $300 billion every year.

72 percent of Americans reported feeling stressed about money at least some time in the prior month. American Psychological Association
Research shows that stress induced by poverty can have several detrimental effects on a child’s brain development including the atrophy of the hippocampus, the part of the brain responsible for processing emotional memory.
Arthur Dobrin on Psychology Today

Rich Americans live up to 15 years longer than poor peers.
Survey by the Lancet as reported by the Guardian

When you examine socioeconomic status (SES), a composite measure that includes income, occupation, education, and housing conditions, starting with the wealthiest stratum of society and every step downward in SES correlates with poorer health.
Georgia Standards

People who reported stressful work- or money-related events had an increased risk for having metabolic syndrome, a group of conditions that puts you at risk for heart disease, diabetes, and stroke. And the risk was increased if people reported several episodes of stressful money-related events.
Diabetes Care as reported by Everyday Health

Middle-aged Americans who experienced a sudden, large economic blow were more likely to die during the following years than those who didn’t. The heightened danger of death after a devastating loss, which researchers called a “wealth shock,” crossed socio-economic lines. About 1 in 4 people in the study had a wealth shock, which researchers defined as a loss of 75 percent or more in net worth over two years. The average loss was about $100,000.
Global News

Health research has increasingly suggested that toxic stress in childhood is a lifelong health risk. Poverty isn’t the only cause of toxic stress. But, Pulcini said, few would deny that it is an important cause.

NFEC Position Statement

There are personal stories behind the statistics that show the true impact of how money impacts our lives. For example, read this comment that highlights the toll taken by problematic finances: “My husband and I work jobs, and yet 30 years later we’re barely getting by. We’ve been struggling for years and it’s gotten more stressful recently. To keep our place, we’ve pulled everything out of our retirement account and still have a lot of credit card debt. The worst is that I’m not able to help pay for our oldest to go to college. I feel like we’ve failed our children and ourselves.” If you consider that this is a story of a family in an above-average financial situation, you can only imagine how severe the personal impact would be for those already suffering housing and food insecurity.

At the NFEC we address financial wellness from a holistic perspective. The foundation of our training is based on education, behavior modification, financial sentiment, and helping people set up the systems they need to help them better manage their finances. Our efforts are bolstered by our honored financial education champions, with whom we collaborate to build financial capability among the widest possible audience. The resources have been tested by thousands of organizations and provided to educators who teach personal finance.