Americans have been hammered by life changes since the start of the pandemic, and it’s taken a big mental and financial toll.
In just the last year and a half, many Americans either left a job, moved or changed their relationship status, for better or for worse — or even all of the above.
Finances are now the No. 1 cause of stress, more than politics, work and family, according a CreditWise survey.
Younger generations, who felt the brunt of these changes, report feeling more stressed about money than older ones. In fact, the majority of Gen Zers and millennials say finances are at least somewhat stressful.
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“Normally it would have taken five to seven years to make a big jump, now we are condensing the timeline,” said Lori Atwood, a certified financial planner in Washington, D.C., and the creator of Fearless Finance, a financial planning app for young adults and families starting out.
Naturally, so many major life events happening almost at once can trigger financial anxiety.
Further, anxious or stressed adults are more likely to engage in other costly financial behaviors, including withdrawing cash from retirement accounts and borrowing from high-cost financial services firms, according to another report from the Financial Industry Regulatory Authority Investor Education Foundation and the Global Financial Literacy Excellence Center.
Atwood advises clients at the outset to “make a plan to reduce spending enough to save on a monthly basis.”
Few people are financially prepared for such quick decision making, and even then, reducing expenses is the best first step, she said.
“You’ve got to have some runway, some cash reserves, to give this a go.”
Even more young adults are planning to make a major change in the year ahead.
About 4 in 5, or 81%, of working millennials expect to reach another milestone, including buying a new home, changing jobs, having a child or adopting a pet, according to a MetLife survey. More than half also said they are stressed about those future money issues.
“As we transition to a new phase of work and life amid the pandemic, millennials are facing new hurdles as they revisit aspects of their lives they had, until now, put on hold,” said Marquis Smallwood, a vice president of workforce engagement at MetLife.
To shake off anxiety and take control of your financial life, try these steps.