If you’ve been stressed about your finances lately, you likely aren’t alone. New research from Western University has found that for North Americans, financial stress is at its highest since the 2008 financial crisis — and these feelings are the same regardless of your demographic.
The study was led by researchers from Canada’s Financial Wellness Lab at Western University, and carried out in partnership with the software company Ceridian.
For many Canadians, 2022 was a year marked by financial hardships; and unfortunately, 2023 isn’t looking much better. To investigate how the present economy is affecting our mental health, the team at Canada’s Financial Wellness Lab surveyed more than 4,200 workers across the United States and Canada.
The survey covered a wide range of demographics, including North Americans of different ages, genders, economic statuses, and physical locations. Study participants were asked about their attitudes towards personal finances, as well as ongoing economic concerns such as inflation and rising interest rates.
To understand the results of the survey, the researchers used a machine learning algorithm to group participants’ responses into one of three categories: stressed, unsettled, or comfortable. They then looked at how survey responses varied across different demographics.
Overall, the team found that 60% of North Americans are more stressed about their finances today than they were a year ago. Of that 60%, roughly two-thirds reported using emergency savings to pay for necessities over the past year.
These results were consistent across different demographics, with the majority of North Americans feeling financial stress across the board. Most interesting was the fact that even wealthy North Americans reported high levels of financial stress.
“Our results showed there are plenty of middle-aged Canadian households with high family incomes in the ‘stressed’ cluster,” said Matt Davison, Dean of Science and Principal Investigator of Canada’s Financial Wellness Lab at Western University, in a news release.
“In general, stress cuts across all demographics,” added Chuck Grace, Program Director at Canada’s Financial Wellness Lab and professor at Western University’s Ivey Business School.
“In late 2022, financial stress is prevalent amongst older and younger respondents, males and females, both high and lower household incomes, families and singles.”
These results are not only troubling for the mental health of North American workers, but may also cause issues for employees, according to the researchers. In an interview with Ceridian, Grace explained that financial stress is causing employees to be less productive at work, resulting in potential losses of more than $600 billion.
Financial stress can cause serious physical and mental health problems, and it’s important to be aware of strategies that can help you cope.
At the same time, we need to urge our governments and policymakers to be mindful of the financial burdens many North Americans are currently facing. Programs such as emergency wage subsidies or financial benefits for those facing economic hardships could help North Americans cope with financial stress while weathering the current economic storm.