Stress balls for everyone!
A recent study by Northwestern Mutual studied 2,000 adults and found that 36% say their anxiety has risen in the past three years. Only 14% say it’s gone down.
And what has them worried the most? The unknown.
Unplanned expenses accounted for 55% of worry, ahead of retirement and even credit card or student debt. of that, unexpected financial emergencies accounted for 38% and medical expenses for 34%. Other ones of note were job loss, remaining unemployed and outliving retirement savings.
Aware or hyperaware?
What stands out to me is that people are stressed about things that could happen even when everything is going well.
They don’t need to lose a job to realize that they’re on dangerous financial footing. They know that it wouldn’t take much to drag them under. So they can’t relax even when things are (more or less) going well.
I suppose that’s a step up from the blase attitudes before the recession, but this isn’t healthy either. It’s one thing to be financially aware. It’s another to be hypervigilant to the point of constant worry. And I’m not overstating “constant” — 28% (560) of the study’s participants admitted to worrying about money every day.
It’s good that they know they’re not untouchable. But to constantly fret, to not feel safe even when they have jobs, even when things are going relatively well… That’s not a healthy way to live.
Worrying ourselves into the ground
In fact, this worry is away at people’s peace of mind (and body):
- 67% say their health is impacted
- 70% say their happiness is impacted
- 61% says their home lives are impacted
- 70% says their moods are impacted
- 51% say their social lives are impacted
- 41% say their careers are impacted
- 69% say it keeps them from pursuing their dreams, passions or interests
So… financial anxiety is making us sick and miserable, straining marriages and other relationships and even endangering our jobs.
Given that divorce, unemployment and depression are huge financial blows, we’re arguably making things worse by worrying about how bad things are.
Do savings really help?
The obvious answer is to save, save, save. Emergency funds, we’re told, will provide peace of mind. But there’s two problems with this.
First of all, according to another recent study, around half of all Americans couldn’t cover a $400 financial emergency. They’re living paycheck to paycheck.
Second, unexpected expenses can get pretty expensive.
Perhaps some of those financially unstable folks could benefit from some frugal hacks. But the fact is that the middle class has stagnated for years. While the cost of living rises — even ignoring the lure of technology — wages have mostly stayed the same. And that’s assuming you’re even lucky enough to be middle-class!
I’m sure some financial prudence would help those who have (or should have), but they might not be able to get too far ahead. Especially if they have to deplete emergency funds to cover the expenses.
If you save for six months, nine months, a year to build up a $5,000 emergency fund, it could be cut in half by one nasty illness. Between lost wages and co-pays, you might even deplete it.
Then you have months of painstakingly building it up back, while desperately praying no more expenses rear their heads. And, come on, of course they will.
Don’t get me wrong, I’m not saying people shouldn’t save. It’s much better to have your savings cut in half than to find yourself $2,500 in debt.
What I am saying is that it may not provide as much peace of mind as we personal finance bloggers like to believe/preach.
I still don’t feel safe
Honestly, our savings don’t do me a lot of good. I still have a ton of financial anxiety.
I mean, it’d be much worse without a savings account and emergency fund. But I don’t feel peace of mind when I look at our accounts. I simply see more unexpected expenses waiting to deplete them.
You can blame it on the fact that we’re about to deplete savings with the $27,000 we’re sinking into Tim’s mouth this year. But the fact is that we’ll always have things vying for our financial attention, in and around a lot of medical bills.
I did the math recently, and we’ll have spent more than $2,000 this year on prescriptions alone. That’ll be great at tax time, but it’s painful for the pocketbook.
Meanwhile, we still need to start really focusing on our retirement fund, saving for double pane windows, putting extra down on the mortgage and eventually — God willing and the creek don’t rise — getting a rental property. The latter being especially important given that we won’t have a ton of money in retirement thanks to this late start (at least on really socking away money in earnest).
But without Tim’s check, it’ll be difficult. And even assuming we can win the appeal, getting a hearing in front of a judge will take another 10-18 months. If we have to go further than that… Well, at least we’ll have a bunch of money saved up for future reference.
Meanwhile, without that $776, we’re a lot more susceptible to not being able to cover especially nasty credit card bills. And we seem to have a lot of those lately.
I’m just as scared
So I guess, despite our good income, I’m not much better off than the study’s participants. I worry about what the next expense will be — not whether it will be. I worry about whether we’ll be able to cover it out of my check or have to dip into savings.
And yep, money worry definitely impacts our home life. Tim doesn’t understand why I have such a death grip over small amounts. (Answer: Because they add up — especially while we’re living on less to compensate for the pool table and accompanying renovation.) So we’ve been known to argue about relatively small things. But again, small things add up.
If we can at least max out the IRA this year and get $2,000+ back into savings, I’ll try to relax a little. The yearly bonus should help with that. And I’m guessing we’ll have a nice chunk of change on the tax return. But I’m trying not to count on either one.
In the meantime, it’ll be about deep breathing, remembering that we can replace windows and do other renovations in dribs and drabs — and knowing that at least we can cover $400 emergencies.
Are you freaked out about money a lot? Do you think you should be calmer?