Americans Are Just as Anxious About Money as They Were One Year Ago. Here’s How to Manage the Stress

A photo to accompany a story about financial anxiety Photo courtesy of Gabriella Braddock
Gabriella and Tyler Braddock with their children. The Braddocks were among millions of Americans who faced financial hardship and increased stress about money in response to the COVID-19 pandemic.
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One year ago, Gabriella Braddock and her husband Tyler were “simply trying to survive,” as they told NextAdvisor at the time. New Jersey’s stay-at-home order in response to COVID-19 forced them to close their small business — a recording studio — and move what operations they could online.

“We had to completely deplete our savings while we were in shutdown,” Braddock, 26, says now. “Our studio was making next to nothing, but we had all of our regular expenses. We didn’t defer any payments, because we would just have to pay them eventually anyway.”

The Braddocks were among a majority of Americans who had anxieties about money at the onset of the 2020 coronavirus outbreak and economic downturn, according to a NextAdvisor survey.

One year later, Americans are no less anxious. One third of Americans (34%) say they feel somewhat anxious about their financial situation, and 17% report feeling very anxious, according to a new survey by NextAdvisor undertaken in June. When we asked a similar question in June 2020, we got nearly identical results: 36% were somewhat anxious, and 15% felt very anxious. 

In each survey, we found a majority of respondents (51%) suffering from financial anxiety. 

“The pandemic has leveled the field for financial anxiety across the board — it impacted everyone,” says Erika Wasserman, a financial therapist and founder of Your Financial Therapist, who is based in Florida. Many were directly affected, through unemployment and income loss, but even those who weren’t still had to manage through an uncertain economic climate. 

How anxious do you feel about your current financial situation?

Financial Effects of the Pandemic

Looking at how Americans’ financial health has changed over the course of the pandemic, our survey reflects the widening inequality and K-shaped economic recovery some experts had predicted: only 20% of respondents say their personal financial situations have been positively affected, while 22% say their personal finances have taken a hit. Another 51% say their financial situation has not changed since one year ago.

The pandemic magnified a divide already happening in our society, says Anna N’Jie-Konte, CFP,  and founder of Dare to Dream Financial Planning, a virtual financial planning firm. “There are disparate results of the pandemic based on where you stand economically, education-wise, in terms of your socio-economic status.” 

And some have experienced more hardship than others throughout the pandemic.

“We’ve almost gotten even more split in an economic space,” says Dr. Robin Norris, a financial therapist and founder of Windward Optimal Health in Virginia. The wealthy had opportunities to get wealthier, she says — the housing market boomed, and the stock market hit multiple new highs — while millions in more disadvantaged positions lost work and income, and struggled to balance necessary expenses with growing costs like child and elder care.

Who’s Been Most Affected?

Following what we’ve seen from unemployment numbers over the past year, there is a disparity in how the pandemic has affected already-marginalized groups. 

According to NextAdvisor’s survey, Hispanic Americans (27%) are more likely than White or Black Americans (both 21%) to have experienced a negative financial impact. And Americans who report an income under $40,000 are most likely to say their financial situation has been affected negatively over the past year (28%, compared to 18% of those with an income of $40,000 or more).

When it comes to age, 25% of Generation X (ages 41-56, those most closely approaching retirement age) report experiencing a negative effect on their personal finances, the most of any generation.

Why Do We Feel Anxious About Money?

Compared to one year ago, debt and lack of savings are still the biggest causes of financial anxiety for many Americans. But the number of respondents who named those among their top three causes for anxiety has grown.

The pandemic “really gave each person their individual challenges,” says Norris.

We asked survey respondents to cite their top three reasons for financial anxiety. These were their most frequent answers: 

  • Debt: 42% (23% credit card debt, 27% other debts) 
  • Lack of savings: 42%
  • Retirement planning: 28% 

Here’s how that compares to survey results from one year ago:

  • Debt: 37% overall (21% credit card debt, 24% other debts) 
  • Lack of savings: 35%
  • Loss of employment or income: 31%

Loss of employment or income was the third most common financial stressor last year, affecting 31% of respondents. Despite a 6% decline, a quarter of Americans (25%) still consider loss of employment or income among their biggest financial stressors.

Which of the following aspects of your personal finances are among your top three biggest causes for anxiety following the coronavirus outbreak? 2020 vs. 2021

Note: Respondents could select up to three options. In addition to these options, respondents could choose “Other” or “None of these.” The 2020 wording of the question was “since the outbreak [of the COVID-19 pandemic],” while the updated 2021 wording was “currently.”

While fewer people are feeling anxious about income loss today, concerns about debt payoff and savings have increased. Lack of savings and retirement planning saw the biggest growth — anxiety about savings grew by 7% over the last year, while anxiety about retirement increased by 8%.  

Nearly 18 months into the pandemic, it’s not difficult to see why. Financial hardship required millions of people to deplete their savings to pay for basic expenses. And those were the people who had an emergency fund. Many do not. Before the pandemic, more than 40% of Americans would have been unable to cover a $400 emergency without borrowing money. Emergency fund or not, many unemployed workers took on increased debts just to make up for lost wages.

For those who did lose work — at peak unemployment in April 2020, there were 23.1 million Americans out of work — state unemployment benefits, as well as federal supplements under multiple stimulus packages, provided some relief. 

The Braddocks in New Jersey found some respite through federal relief programs. “The first round of PPP loans, we knew nothing about so we didn’t apply for them,” says Gabriella Braddock. As they learned more about the loan forgiveness process and other restrictions, they decided to take advantage of the second round.

For many Americans, that aid went to paying basic necessities, like food and rent. “The reality is, I wouldn’t have survived the last three months without the money,” Danielle Piscatelli, an outdoor guide and educator based in Colorado who lost work during state lockdowns, told us last year.

It’s true that things are improving for many: small business owners like the Braddocks have been able to reopen as state restrictions ease up following increased vaccination rates, and the latest jobs report shows the unemployment rate at 5.9%, a marked improvement over last year’s numbers. But, especially for those most affected, the consequences — both mental and financial — may be lasting.

“This has been a really traumatic, stressful event for so many people — for everybody really, and I think it’s going to be really important for us as individuals, in terms of our own financial situation, to separate this generalized anxiety from the reality of our financial situation,” N’jie-Konte says.

Overcoming Financial Anxiety 

Financial anxiety can have outsized effects on our lives, and the stress can also appear in different and unfamiliar ways.  Wasserman says to look for signs like irritability and lack of sleep, or even physical pain like migraines and toothaches. 

Stress can also build over time, especially when it’s not dealt with. And the experts we spoke to say they often see people use avoidance tactics to handle their anxiety, which can make things worse. 

“That’s really, really common, just kind of sticking your head in the sand,” says Kathy Haines, LPC, a financial therapist and founder of Imagine Counseling Services in Georgia. Someone might say, “’I don’t look at it, it’s not there, I don’t have to deal with it.’ And then that snowballs and can lead to embarrassment and shame…And then people tend to not want to ask for help. So it just keeps getting worse and worse and worse.”

Braddock says learning to get help was the biggest lesson she learned this year. “I felt so personally responsible for our success and for getting out that I just put so much undue stress on myself that I didn’t need,” she says.

Ways to Deal with Financial Stress

Asking for help from loved ones and having a support system can be a great place to start. And once you’re ready to take the next steps, there are many strategies for dealing with financial stress:

Start With Your Truths 

A lot of anxiety stems from the unknown. Maybe you’ve avoided your true debt balance or the state of your bank account for a while. Or you have anxiety about the future and any uncertainty to come, as federal unemployment programs and eviction moratoriums are set to end. 

Simply identifying and naming the cause of your stress can be a big first step. “Try to understand what the worry is because if you’re not writing the fear down, you can’t conquer it,” Norris says. Put your financial fears into words.

Make a Plan 

Wasserman recommends starting with what she calls your actuals. These are the facts of your financial situation, including how much income you’re bringing in and how much you’re spending.

Once you have those facts, you’re no longer spiraling through unknowns and can make a plan. And if a big goal like “saving money” sounds overwhelming, especially after this last difficult year, start small. 

“Don’t lose sight of your goals, just readjust them and maybe make them micro,” Wasserman says. “If your goal is to save money in your emergency fund, start with $5 a week. Instead of buying lunch everyday, put that money each week toward an automatic transfer into your savings account.”

Start Tracking  

Tracking your cash flow is a great habit to start. But Norris says it can help not only to keep track of what you’re spending, but how spending affects your emotions. That information can help you parse the stressors that money is causing you. When you pay bills, or click “Buy Now” online, ask yourself, what do you feel? 

“Was that relief?” she asks. “Does that fill some sort of need? And then is there regret? That’s where the emotional part of [spending] comes in.”

Believe in Change

“The one consistent thing in life is change,” Wasserman says. “Your financial goals might change, your salary, your income might change. It’s how you adjust to it.” 

As Americans have had to shift their career plans, living situations and daily routines through the pandemic, it’s also given people the opportunity to reevaluate their financial goals. 

“This is not your forever; this is your right now,” Wasserman says. “So if your right now is half of what you used to live on, what can you adjust and change in the short term to live within your means? This doesn’t mean forever, and I think that’s where a lot of anxiety comes in. People feel that this is going to be their forever when it’s not.”

Prepare, but Don’t Forget to Live

The pandemic’s effects were wide-ranging, and we’re only just beginning to see what recovery means, in every sense of the word. But it will take time. 

If you have experienced heightened financial anxiety over the last year, N’jie-Konte warns against letting your fear dictate your future and your financial goals.

You can build up your emergency savings for when the unexpected happens while also pursuing other financial goals like funding a retirement plan. The goal is to cover your bases without getting caught up in absolutes like, “No matter what happens, I’ll be fine.” “I don’t think that that’s a realistic level of financial certainty that anybody can expect,” she says.

That’s a lesson that Braddock has taken to heart, too. 

“I think that my relationship with money used to be very black and white. It used to be either you’re successful or you’re not, you’re rich or you’re not. And now I think it’s super gray,” Braddock says. “We really learned that money is going to come and money is going to go, but if you always focus on when it’s going to go, you’re not going to really appreciate when you do have it.” 

She says they’re trying to live in this moment of growth and prosperity while they can, while still building a safety net. “So that when a rainy day does come — or rainy month or rainy quarter or a rainy year — we’re able to say, you know what, we’ve got that covered. We’re going to be okay if we need to stay home for a month, or we’re going to be okay if we need to stay home for a year. Which is something that I never would have said in the past.”


2021 Survey: All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2886 adults. Fieldwork was undertaken between 2nd – 4th June 2021. The survey was carried out online. The figures have been weighted and are representative of all US adults (aged 18+).

2020 Survey: All figures, unless otherwise stated, are from YouGov Plc.  Total sample size was 2562 adults. Fieldwork was undertaken between 1st – 3rd June 2020.  The survey was carried out online. The figures have been weighted and are representative of all US adults (aged 18+). 

When comparing 2021 and 2020 figures for how anxious Americans feel about their financial situation, the 2020 wording of the question was “in relation to the COVID-19 outbreak,” while the updated 2021 wording was “currently.”

When comparing 2021 and 2020 figures for Americans’ top three causes of financial anxiety, the 2020 wording of the question was “since the outbreak,” while the updated 2021 wording was “currently.”