Money can influence powerful emotions in people. In fact, the vast majority of people find that being on solid financial ground makes them feel better or happier than anything else. Still, it’s no surprise that debt is a major concern for most people.
That’s according to a study by Northwestern Mutual, which spotlights how U.S. adults view money and make financial decisions. The online survey polled 2,003 adults in March 2018, including 601 millennials.
While money inspires feelings of well-being and confidence for the 87 percent of respondents in this study, it can also create negative feelings. For 48 percent of those surveyed, their finances create feelings of fear, while 52 percent feel insecure about their financial picture, and 54 percent feel anxious.
Money was named as the main reason for feelings of stress for 44 percent. Personal relationships, by comparison, were the main source of stress for 25 percent of those surveyed. Work, another common cause of worry, was only named as the main reason for stress for 18 percent of the people.
Certain subcategories of finances created greater sources of stress for people. The most worrisome aspects of finances include the increasing cost of healthcare, financial emergencies, health emergencies, income, inadequate savings, debt, and retirement savings.
Worry and depression about finances hit some people particularly hard, with 41 percent saying it hurts their relationships with their partners. Of those surveyed, 45 percent say they have skipped social gatherings because of finances, and another 38 percent report their financial issues have caused problems with family members besides their partners.
Concerns About Debt
Debt reduction remains a big concern and priority for U.S. residents, with 53 percent saying lowering their debt was their biggest money goal in 2018. Despite this priority, personal debt, not counting mortgages, increased to an average of over $38,000, climbing from just above $37,000 last year.
The information from the study supports that U.S. residents are losing their battle with debt. For example, 33 percent have racked up $5,000 to $25,000 in debt, compared to the 17 percent who have that amount in personal savings.
Currently, 13 percent of Americans believe they will have debt at some level until they die. And the percentage of people who aren’t carrying any debt in 2018 is at 23 percent, compared to the 27 percent of people who didn’t have debt last year.
This year, credit cards have equaled mortgages as the top kind of debt people carry, going from 19 percent last year to 25 percent this year, among the survey’s respondents. Another significant source of debt included student loans, which were carried by 6 percent of those surveyed. Millennials, however, were harder hit by student loan debt with 28 percent carrying that kind of debt. Car loans were the leading source of debt for 7 percent of those surveyed.
As further evidence that debt continues to be a big factor for people, two out of 10 said they funnel anywhere from 50 percent to 100 percent of their earned income toward repaying their debt.