Financial Stress Hitting Moms The Hardest by Financial Finesse

Key findings:

  • Financial stress is hitting low and middle income mothers the hardest. Fifty-five percent of women ages 30-55, with household incomes of $60,000 or less, who have minor children report “high” or “overwhelming” levels of financial stress. This is 40% more than similar-aged male parents in the same income group.
  • In every age group, women were more likely to report significantly higher levels of financial stress than men.  Age also contributes, as do income and parenthood.
  • On the contrary, twenty-six percent of men under 30 report they have no financial stress at all.

There appears to be an interesting dynamic occurring, in which women are feeling less control over their financial situations than men–even compared to those in the same demographics. Women are responding positively however, seeking more ways to improve their circumstances through financial guidance when provided to them as a free benefit in their workplaces. Our data shows that in 2014, approximately two-thirds of total users in our education programs were women, and they appear to be taking steps to improve their finances upon using these financial wellness programs.

2015 Financial Stress Report

Executive Summary

In 2014, a sizeable number of employees continued to experience “high” or “overwhelming” levels of financial stress, with 23% reporting significant financial stress in both 2014 and 2013, compared to only 18% in 2012 and 19% in 2011.

This high level of financial stress is somewhat of a contradiction with continued improvements in the U.S. economy and lower gas prices, which have contributed to a steady rise in investor and retirement confidence. However, a recent Gallup poll found that Americans are spending more on the things they need most, such as food, health care, and utilities. The 2015 Stress in America™ study commissioned by the American Psychological Association (APA) shows that stress about money and finances is prevalent nationwide, partly due to increases in the cost of health care.

With 85% of employees reporting at least some level of financial stress, employers should be on the alert that in some cases, according to the APA study, employees may actually put their healthcare needs on hold because of financial concerns. This is very likely why a recent Aon Hewitt study indicated that 93% of surveyed companies intend to focus on the financial well-being of their employees in a way that extends beyond retirement and 67% are very or moderately likely to communicate to employees how financial stress impacts health and well-being.

Financial Stress

According to our findings, financial stress varies dramatically based on employee demographics. The charts below illustrate how gender, in combination with age, income level, and the presence of minor children, can affect an employee’s level of financial stress:

Financial Stress Hitting Moms The Hardest [Report]

An analysis of factors that contribute to stress revealed that gender is a primary indicator of financial stress, with women being twice as likely as men to report feeling overwhelming financial stress. Even in combination with age, income, and the presence of minor children, gender played a major role in the level of stress reported by users. According to our findings:

  • Almost three times as many male Millennials under age 30 reported no financial stress compared to their female counterparts.
  • Males with household incomes under $60,000 a year were more than twice as likely as their female counterparts to report no financial stress, at 19% versus 7%.
  • Women’s stress levels seem to be impacted by the presence of minor children in the household. Ten percent of women with minor children reported having overwhelming levels of stress, compared to only 3% without children. Men’s stress levels seem to not be significantly impacted by the presence of minor children, as only 3% of men with or without children in their household reported overwhelming levels of financial stress.

Financial Stress

Financial Stress

Employee Financial Picture

With financial stress quite prevalent in today’s workforce, there is a level of heightened concern with 23% feeling their financial stress is high or overwhelming. However, this is down from serious concern in 2009 and 2010 when over 97% of employees were reporting some degree of financial stress, and approximately one third reported high or overwhelming stress.

Financial Stress

Financial StressFor the full year of 2014:

  • 15% of employees stated that they have no financial stress.
  • 62% of employees reported that they have some financial stress.
  • 18% of employees felt that their financial stress level is high.
  • 5% of employees are at a point where their financial stress is overwhelming.

Financial Stress

With almost half of larger companies (i.e., those with 500+ employees) offering consumer driven health plans (CDHPs) in 2014, it is no surprise that wellness scores decreased by almost 1 point in the area of insurance. Due to projections that 66% of large companies are very likely to offer a CDHP in 2017v, we will be keeping a watchful eye on the impact this may have on employees who will now be facing higher out-of-pocket healthcare costs. The good news is that we saw improvement in the cash management wellness score of those reporting a high level of stress, with an increase of 0.5 compared to the prior year. Overall, there was a 2-point improvement in the percentage of employees that reported having a handle on their cash flow, up from 68% in 2013.

See full report below.