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Inside the Wallets of Working Americans

At a time when the United States is seeing low unemployment rates¹ and high job growth, the results of our second annual survey reflect the stark reality that almost half of working Americans face: even when you’re employed, it’s hard to keep your head above water when it comes to personal finances. In many parts of the country, wages aren’t rising enough to cover increased costs of living², leading to higher levels of high-cost consumer debt³. 

 

So what does this mean for the wallets, and more importantly, the overall wellbeing, of working Americans?

 

Our survey results show that many more working Americans (42%) are dealing with financial stress than stress in other areas of life: 31% report work or career issues, followed by 29% who are worried about their health, and 27% who are experiencing troubled relationships. 

 

And money worries bleed into other areas of life in significant ways — most notably, the workplace. People who are financially stressed are 11x more likely than those without to have sleepless nights, 10x more likely to not finish daily tasks at work, 9x more likely to have troubled relationships with their coworkers, and over 2x more likely to be looking for a new job. They are also much more likely to suffer from poor mental health: they are 6x more likely to experience anxiety and panic attacks, and 7x more likely to be depressed than those without financial stress.

 

Financial stress shows up in different ways across people with different incomes, ages, or educational backgrounds, but one thing is clear: it’s not just those who take home less money that are having trouble making ends meet. There is a persistent narrative in America that if you make enough money, financial concerns simply vanish. But with large increases in costs of necessary expenditures like housing⁴ and higher education⁵, salaries alone aren’t enabling most people to reach the financial milestones that previous generations could expect.

 

Thirty-one percent of people who make over $100,000 run out of money before payday. Keep in mind that these incomes are 4x the average in the United States³. This shows us that financial stress is a problem that permeates the wallets of working Americans in all walks of life. 

 

As a result, an increasing number of people are turning to high-cost sources of credit like high-interest credit cards, payday loans, and overdraft fees to get by each month. More than 40 percent of working Americans who use credit cards carry more than $3,000 on their balances month to month. The band-aid solutions are even more acute amongst those under the age of 35, with 30% paying over $100 in overdraft fees in the past year, and 15% having taken out a payday loan. Perhaps unsurprisingly, emergency savings are scant: 48% of people don’t have a way of setting aside money for emergencies, and many of them feel anxious about that fact.

 

There’s a persistent financial literacy problem across all demographics, incomes, and education levels, as well. Even people who say that they know their credit score are more likely than not to over- or underestimate their actual score by a significant degree. So even though personal finances are clearly a major area of stress or importance to the majority of Americans, most people still don’t have what they need to feel confident in managing their financial situation and wellbeing.

 

Employers experience the negative downstream effects of employee financial stress through lower productivity and increased turnover costs, to the tune of 13-18% of their annual payroll. This isn’t contained to lower-level employees, either.  While the highest percentage of financially stressed employees are trainees, the second highest are the VP / President followed by the C-suite. Fortunately, people overwhelmingly say they trust their employer when it comes to their personal financial situation (82%) and many agreed that their employer offering financial solutions as voluntary benefits would be of value to them.

 

The 2nd Annual Salary Finance Report, Inside the Wallets of Working Americans, takes a deep dive into all of these issues and more. The research goes beyond the US jobs report to show the reality working Americans are facing. Ignoring the impact of financial stress in the workplace will only worsen the state of employee financial wellness.

 

Download the full report for an exclusive look inside the wallets of working Americans.

 

Sources:

¹ Economic Policy Institute

² PayScale Index

³ U.S. Department of Health & Human Services

Unison 2019 Home Affordability Report

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