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If you’re worried about money, you’re not alone. Many Americans are dealing with financial stress and uncertainty during this difficult time. The pandemic has spurred a sense of financial futility — and the war in Ukraine, skyrocketing inflation, and soaring housing and rental prices have done nothing to ease feelings of financial anxiety.
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Add to that the elimination of initiatives created during the COVID-19 pandemic — like student loan forbearance and the enhanced child tax credit — and it’s no wonder tax worries are so common.
In its fourth annual “Inside the Wallets of Working Americans” report, Salary Finance found that 45% of American workers surveyed feel financially stressed – that one in five respondents run out of money between paychecks.
The investigation also revealed that:
- About 75% of respondents said inflation had an impact on their finances.
- More than 66% of respondents have no money set aside for emergencies.
- More than 54% of respondents have less cash in the past year than the year before.
- About 50% of respondents have no emergency savings and are worried about it.
- About 43% of respondents are not satisfied with their current level of savings.
The results are sobering, but even before the global coronavirus pandemic and the resulting economic fallout became a factor, a study by the American Psychological Association (APA) found that 72% of Americans felt stress about the money at least some of the time. Recent economic difficulties have exacerbated existing financial concerns rather than creating new ones. Additionally, Salary Finance claims that over 80% of respondents who reported financial stress suffer from anxiety and almost 60% suffer from depression.
Getting out of a big money pit is tough in tough times, and getting back to a debt repayment schedule after a period of forbearance is even tougher. Nearly 60% of workers surveyed with student loan debt took advantage of the federal CARES Act-initiated forbearance program, and more than a third of those people said they wouldn’t be able to start paying back their loans at the moment.
For the 59% of parents of school-aged children who benefited from the enhanced child tax credit program (according to this particular survey), 40% said the money helped them accumulate savings and more 20% said it helped pay regular bills.
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Although the study revealed a promising note of increased work/life flexibility compared to the aforementioned negative factors among respondents, concerns remain. Financial stress that stems from current global social and economic factors can lead to more adverse financial outcomes, such as decreased regular and emergency saving, increased credit card spending, and increased rate of withdrawals anticipated retirement savings.
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