Skip to content

Jon Dulin | Wealth of Geeks

Consumer credit card debt stands at record highs, and about how to cover one month of expenses if they lose their job. Stubbornly high prices combined with stagnant wages, results in more debt and stress for many Americans.

In an interview with Marketwatch, Greg McBride, Chief Financial Analyst for Bankrate, said, “A lot of the spending that takes place is being done out of necessity, not choice. For a lot of these households, it’s not because they’re living large. It’s because they’re trying to keep up. Inflation has stretched budgets. Those that were previously saving may be saving less or not saving at all. Those that weren’t saving have been leaning on credit to fill the gap.”

State of the union

, published by the Center for Microeconomic Data, tells a grim story about household debt in the United States. At the end of the fourth quarter of 2023, household debt balances were $17.50 trillion, a 1.2% increase from the third quarter of 2023 and a $2.4 trillion increase since the end of 2019.

Mortgage debt makes up $12.25 trillion of household debt, debt accounts for $1.13 trillion, auto loans make up $1.61 trillion, and student loans stand at $1.6 trillion.

Families who face mounting expenses seek ways to supplement income, like . Around 45% of working Americans have a side hustle, and .

Financial stress impact

In a recent survey conducted by Bankrate, report money negatively impacts their lives and cited economic factors as the root cause. The most prevalent issue causing financial stress was insufficient emergency savings. More than half of the respondents — 56% — name it as the top stressor that affects their mental health.

The survey also found that women tend to worry about money more than men. Women are also more likely to experience the effects of financial stress in the form of mental health issues — 56% of women compared to 47% of men. 29% of individuals who name money a stressor say they worry about it daily.

Most of the respondents (82%) whose mental health was affected due to money worries say that the U.S. economy is the leading cause. Some of the specific factors related to the economy include rising prices and inflation (68%), rising interest rates (31%), and lack of job security or stable income (29%).

The economy affects Americans’ daily lives, causing an influx of money-related issues. High prices hamper the ability to feed families or keep a roof over their heads. While and low-income support are available, many find the help they need.

Mental/physical health

A Journal of Family and Economic Issues report examines the relationship between financial stress and psychological distress in American adults. The study explores the impact psychological distress has on the body. Links were found between stress and several health conditions, including reduced immune response, emotional exhaustion, increased mortality, and heart disease. Profound stress can also trigger debilitating depression and anxiety.

Financial stress can cause mental and physical health problems, and those impacted may be reluctant to seek help to avoid adding to already mounting expenses. Unfortunately, health care often falls by the wayside when Americans must choose between medical needs and food, an increasingly common scenario.

Many people delay treatment for mental and physical health issues. Some won’t seek treatment at all because they cannot afford it. Americans who cannot afford insurance may lean on their state’s Medicaid program, provided they qualify. Sadly, these programs often label office visits, diagnostic tests, treatments, and medications as optional rather than imperative.

Make ends meet

While many may feel hopeless, there are steps those struggling can take to improve their finances. The starting point for most is budget creation, which allows consumers to monitor spending. After studying spending, consumers can reduce expenses and focus on building emergency funds and paying down debt.

Although many cite difficulty getting government assistance, resources are available at the state and federal levels. Struggling Americans seeking resources can call 211 for mental health services, housing information, financial assistance, and other essential community service information.

Because this can be a slow process, some people use creative additional income or cut expenses. They find that using balance transfers to lower their credit card interest rate helps, or they find to help cover day-to-day spending. Others take advantage of the gig economy to increase their income. Those facing emergencies may resort to moving in with friends or living in their cars.

Moving forward, most Americans hope for easing prices, which would allow them some relief not only with their finances but also with the stress of trying to make ends meet.

More in Housing