Eliminated Child Tax Credit, Student Loans & Inflation Top Financial Stressors for Americans
If you’re worried about money, you’re not alone. Many Americans are having to deal with financial stress and uncertainty at this difficult time. The pandemic has brought on feelings of financial futility — and the war in Ukraine, sky-high inflation, and soaring housing and rental costs have done nothing to lessen feelings of financial anxiety.
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Add in the elimination of initiatives created during the COVID-19 pandemic — like student loan forbearance and the enhanced child tax credit — and it is no wonder that fiscal worries are so commonplace.
In its fourth annual “Inside the Wallets of Working Americans” report, Salary Finance found that 45% of American workers polled feel financially stressed — that one in five respondents run out of money between paychecks.
The survey also found that:
- Around 75% of respondents said that inflation has impacted their finances.
- Over 66% of those polled don’t have money set aside for emergencies.
- More than 54% of respondents have less cash on hand over the past year than in the year previous.
- About 50% of those polled don’t have emergency savings, and are anxious about it.
- Approximately 43% of respondents are unhappy with their current level of savings.
The findings are sobering, but even before the global coronavirus pandemic and resulting economic fallout became a factor, an American Psychological Association (APA) study found that 72% of Americans felt stressed about money at least some of the time. The recent economic difficulties have exacerbated existing financial anxieties rather than just creating new ones. Further, Salary Finance claims that more than 80 percent of those surveyed who reported financial stress experience anxiety, and nearly 60 percent experience depression.
Digging out of a big financial hole is tough in trying times, and a return to a debt repayment schedule after a period of forbearance is even more difficult. Almost 60% of polled workers holding student loan debt took advantage of the federal forbearance program that the CARES Act initiated, and more than a third of these individuals said they will not be able to begin repaying their loans at this time.
For the 59% of parents with school-aged kids who benefited from the enhanced child tax credit program (per this particular survey), 40% said the money helped build savings and more than 20% claimed that it assisted in paying off regular bills.
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Although the study found a promising note of increased work/life flexibility set against the negative aforementioned factors among those surveyed, anxieties remain. The financial stress that comes from current global social and economic factors may lead to more harmful financial outcomes — such as a decrease in regular and emergency savings, an increase in credit card spending, and an increased rate of early retirement savings withdrawals.
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