Biggest Money Stresses

Nov 22, 2013 by

the american dreamLearnVest financial planning services and Chase Blueprint™ recently published a study titled “The American Dream 2.0: How Americans Define Success and Making It in the U.S. Today.” (Tangent: Pursuing the conventional American Dream clearly isn’t working out too well, in my view, for the pursuers or for the nation and planet. Check out The Center for a New American Dream for a better idea.) The study is based on a survey of 1,223 Americans—846 women and 377 men. Ages ranged from 25 to 54.

American Dream Survey Highlights

A few tidbits from the study that I found especially interesting:

  • Nearly 40% of respondents reported that the recession had “hindered their ability to get ahead”
  • 35% said the recession had lessened their confidence in achieving the American Dream
  • 1 in 7 absorbed a significant pay cut during the recession, and 1 in 8 lost a job
  • 31% of respondents said their parents had been better off than they are now
  • 56% agreed with the statement “I feel like I don’t have enough time to work and take care of my family”
  • 10% agreed with the statement “a woman’s place is in the home” (!!)
  • 35% of respondents say that they check their work email on weekends; 26% check on vacation, and nearly 25% checks again at bedtime!

What Money Issue Stresses Americans the Most?

This infographic, prepared by CreditCards.com from the survey data, illustrates respondents’ answers to the question: which money issue stresses you out the most?

CreditCards.com infographic: Most stressful money issues
 

In a sort of bass ackwards way I find these results encouraging. How poorly Americans are preparing financially for retirement has been well documented. That many apparently at least recognize the challenge is the first step toward progress.

I don’t see my biggest source of money stress on the list. I worry that my strategy for investing our IRA money might blow up in my face. I wouldn’t mind if no one but me knew about the explosion, but Ms. Money Counselor would surely notice the shockwave. Also, since we have a lot of money in cash because I’m wary of stocks, I’m frustrated that saver interest rates have been so low for so long and show little sign of rising soon. Just as tapering appeared imminent, America’s esteemed national political leaders shot the economy in the foot once again. Since the probability of sanity taking over in D.C appears to be zero, the Fed may feel compelled indefinitely to offset the Democrats’ and Republicans’ singular focus on scoring political points at the expense of working Americans.

What’s Your Biggest Money Stressor?

Of the sources of money stress listed in the infographic, which is most stressful for you? Or, like me, is your #1 something else entirely? C’mon, spill.

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  • Travis Pizel

    Another interesting way of looking at the above is the top two (saving for retirement + lack of savings) reflects Americans are spending too much!

    • Yep. Savings = Income – Spending, so there are two ways to boost savings: earn more and/or spend less.

  • My biggest money stressor is lack of income. Thus far I’ve been able to get my emergency fund to a good place and almost max out my ROTH IRA each year, but my prohibitive income and high cost of living in NYC makes it hard to do much else. As an actor, income is so inconsistent and unpredictable, I’m working hard to build more steady, alternative streams of income, but it’s a slow process.

    • That does sound like a financially challenging lifestyle. I’m sure the multitude of fun things to do and places to go and restaurants to eat at in NYC is a constant siren’s song. I like your idea of a secondary source of income to smooth out the humps in your acting income.

  • Fit is the New Poor

    Ours is currently the amount of debt we have. I cant even begin to think about really building our savings until we are able to be debt free. The idea that we are paying a massive amount of interest to student loan companies and credit cards is enough to have anyone freak out!

    • It’s a process, check commenter Travis’ story for inspiration if you need it. Some day all that cash going to interest will be going into your savings if you choose–hang in there!

  • Though I have not been slacking off on the saving for retirement front, I can see why that is a big money stress. My stress when it comes to saving for retirement doesn’t necessarily come from the fact that I’m not saving enough, it comes from not knowing how much I’ll need with inflation, and everything constantly changing.

    • I agree, the future is notoriously hard to predict. I think all we can do is err on the side of caution. But nobody can–or should try to–save enough for every conceivable contingency (though Ms. Money Counselor is trying 🙂 ).

  • Color Me Frugal

    I agree with Daisy that it’s hard to know how to save for something huge like retirement when it is many years away, every time you hear a recommendation it is different, and there are so many other moving targets like inflation, taxes, etc. I worry that we will run the risk of over-saving because it’s hard to know what we need. I guess that would be a way better problem to have than under-saving, but still!

    • Many of the “experts” who recommend huge numbers for a saving goal before you’re ready to retire have a personal financial stake: the more you save (especially if you let them manage your savings), the more money they make. That doesn’t necessarily mean they’re wrong, but it should mean taking such advice with a grain of salt. Also, blanket recommendations can’t take into account your personal preferences for how you want to live. Caveat emptor!

  • Maria Nedeva

    The survey results are fascinating (including that 10% think that a woman’s place is in the home). In the UK we just had results of a study published that found that most 48 year olds are worried about pensions. I was worried about it when I was 24. Now there is certainty – I have been making contributions and if the economy wasn’t so volatile I may have had a decent pension. As it is, it’s time for a different strategy (you know that we at The Money Principle are on a mission to make £2.5 million in five years?).

    My biggest stressor is that there is no obvious place to keep one’s money; banks are not worht it (low interest and they have been having troubles); pension funds perform really badly, stocks and shares are terrible volatile…I suspect I may go back to my great-grandmothers way, buy some gold coins and wear them around my neck :).

  • Right now, I’d say its lack of savings (mostly an emergency fund) I’d like to be prepared for any curveball that life throws my way. Next on the list would be staying financially organized, in a way am still tring to get my financial house in order.

    • Hi Simon, those are too good ones you’ve identified. The ‘staying organized’ one is a challenge for those whose personality type runs counter to keeping track of detail and such. A good piece of personal finance software or online tool can make it easier.

  • MoneySmartGuides

    It’s surprising to see child care rank so low. With the cost of daycare so high, I would think this stressor would be much higher. In fact, all of the money spent on child care could be the reason for saving for retirement being so hard. More money could go towards retirement if child care costs were lower.

    • I agree with you on child care; maybe the result reflects a disproportionate number of respondents with no kids of child care age. I’m guessing child care would rank a lot higher in a survey of people only in the 25-35 age bracket.

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