Among people who have manageable financial stress, 80% have a handle on cash flow, 59% have an emergency fund, and 95% pay their bills on time. For those who have unmanageable financial stress, only 36% have a handle on cash flow, 16% have an emergency fund, and 67% pay their bills on time. Financial Finesse’s study found that 25% of workers experience high or overwhelming financial stress—but 85% of workers feel at least some level of financial stress.
Unmanageable stress levels, according to Financial Finesse, indicate that people feel helpless and are living paycheck to paycheck, with expenses exceeding their income and large debt balances.
Liz Davidson, CEO and founder of Financial Finesse, says her company has developed the “C.A.L.M.” model to help people get a handle on their finances. “C” stands for creating a plan to manage cash flow. “A” is for automating bill payment and saving for emergencies. “L” stands for lowering nonessential spending, and “M” is for making progress one step at a time.
The demographic group most at risk for high financial stress levels are women younger than 30 who have minor children at home and earn less than $60,000 a year; 54% of these women report high or overwhelming financial stress. Financial Finesse notes that an AP-AOL Health Poll found that people carrying high debt levels struggle with depression, anxiety and heart problems. They also experience relationship issues and substance abuse. This should be a concern to employers, Davidson notes.
Luckily, she notes, an Aon Hewitt report found that 89% of employers are interested in offering financial wellness programs. Financial Finesse’s full report can be downloaded here.