Despite the U.S. economy's growth, low unemployment, and declining inflation in the past year, a significant portion of Americans report increased financial stress, according to a recent Allianz Life survey. Forty percent of respondents, up from 34% at the end of 2022, feel more financially strained at the close of 2023.
Inflation's impact over the past few years remains a primary concern for many. Sixty-one percent of participants point to escalating day-to-day expenses as a major financial burden, compared to the previous year. Additionally, of the 29% who received pay hikes in the past year, 73% believe these increases are insufficient to counteract inflation.
Kelly LaVigne, Vice President of Consumer Insights at Allianz Life, emphasizes the necessity of planning to combat the rising cost of living. Despite a slowdown, inflation continues to be a persistent issue. Other significant stressors include insufficient income or retirement funds (44%) and excessive debt (34%).
The survey reveals varying levels of stress across age groups: 46% of Gen Xers, 39% of Millennials, and 33% of Baby Boomers report increased year-end stress compared to the previous year.
Looking ahead, there's a growing inclination among Americans to improve their financial habits. Forty-eight percent of respondents are likely to commit to better money management or increased savings in the upcoming year, a notable rise from 43% last year and 33% in 2021. Millennials show the most optimism, with 59% ready to make such commitments, in contrast to 39% of Gen Xers and 30% of Boomers.
Strategies for financial improvement in 2024 include bolstering emergency funds (17%), paying off credit card debt (16%), and boosting retirement savings (17%).
The survey, conducted online in November, included a nationally representative sample of 1,005 adults aged 18 or older.
LaVigne underscores the importance of a written financial strategy for long-term financial health. A structured plan can guide individuals towards achieving goals like a secure retirement while also mitigating risks along the way.
