How Americans Feel About Finances in 2023

Managing your money mindset is an essential component of building a solid financial foundation. The right outlook can help you approach personal finance positively, which could have a big impact on how you move the needle toward your financial goals.

Unfortunately, many Americans report relatively negative feelings about their financial situation. We will explore how Americans are feeling about their finances as we wrap up 2023.

75% of American adults are worried about the direction the economy is headed.

Americans Are Worried About Their Finances

Americans have seen some significant economic ups and downs in recent years. While the economy has been on a wild ride, households across the nation have had to buckle up for a bumpy year.

With that, it might not be surprising that a recent survey from Ramsey Solutions found that 75% of American adults are worried about the direction the economy is headed. The worries aren’t entirely unfounded, with 54% of Americans reporting that they aren’t prepared for a potential recession.

More shockingly, 34% of Americans surveyed reported that they are either struggling or in crisis with regards to their personal finances. And 51% of Americans reported having trouble paying the bills in the last three months.

Financial Statistics: Economic Woes and Mental Health Struggles

Worrying about money usually isn’t good for your mental health. Since a large percentage of Americans are worried about their finances, it might not be surprising that 49% of Americans reported that their finances have had a negative impact on their mental health. Even more concerning, 2 out of 5 Americans have experienced anxiety attacks from money stress.

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Savings Rates Are Falling

Saving money is a critical component of building a bright financial future. If you aren’t saving money, you aren’t moving the needle forward toward economic stability. With that, your personal savings rate, or the percentage of money you set aside for the future, is an important financial statistic. A higher savings rate means you are progressing toward your financial goals.

According to data from the Federal Reserve Bank of St. Louis, the long-term average personal savings rate is 8.78%. But in October 2023, the average personal finance statistics savings rate was 3.80%. The falling number isn’t a good sign for American household budgets. Essentially, this indicates that households are stretching their budgets to cover essential needs, leaving them with very little to contribute towards savings.

Financial Cushions Are Limited

With falling savings rates, it might not be surprising that many Americans fear the next emergency that comes their way. According to a recent survey, 33% of households have no savings at all. And if an emergency hit that resulted in losing their income, 48% of Americans reported being unable to cover their expenses for 90 days.

Americans Worry About Their Financial Future

While many American households are struggling to get by right now, the immediate financial concerns aren’t their only worry. In budgeting statistics, 54% of Americans are afraid of not having enough money to cover their expenses now and in the future.

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How to Bolster Your Financial Confidence

It’s clear that many Americans have negative feelings about their financial situations. If you are one of the many Americans worried about money, take action to feel better about money. Below are some strategies to consider:

• Write everything down: Getting comfortable with your financial situation starts by understanding where you currently stand. Find a way to pull all of your financial assets and liabilities into a single place. Also, track your spending to find out where your funds are going.
• Be honest with yourself: When you have a clear picture of your finances, it’s critical to be honest with yourself. Look for ways to make adjustments. For example, you might realize that you cannot afford your monthly car payment. This might mean downsizing to a smaller ride.
• Make a budget: While budgets often get a bad rap, making a thoughtful budget can help you regain your financial confidence. Make a plan for where you want your funds to go, then execute the plan. If you make a mistake, acknowledge it and move forward without beating yourself up or throwing away the budget.
• Start saving: Saving money is the only way to build the financial buffer you need to confidently weather whatever storms life sends your way. Open a designated savings account and tuck funds away automatically; even a small transfer will add up over time.

The Bottom Line

Many Americans are worried about their finances. While it’s important to keep an eye on our finances, it’s not good for your mental health to constantly worry about money. If you are facing financial woes, be honest with yourself and come up with a plan to make a change.