Stress, debt, and the power of planning

Over 40% of investors reported being under financial stress, but having a planning mindset can help with that, according to our Money Attitudes Survey 2023. In particular, focusing on things under one’s control—by paying down debt, building emergency savings, creating a long-term investment plan, and, perhaps, seeking financial advice—can make a difference. Here are some key findings.

Finances are a major source of stress for many Americans—even those who are relatively well-off.

And financial stress cuts across demographic groups.

Two figures, one with the heading “How common is financial stress?” and the other with the heading “Who does it affect?” are shown in tandem. In the top figure, a group of head icons with agitated scribbles inside indicate three categories of people who feel significant financial stress. 63% of U.S. adults experience significant financial stress, according to Stress in America 2023: A Nation Recovering from Collective Trauma, American Psychological Association. 42% of Vanguard U.S. investors and 29% Vanguard U.S. investors with assets of more than $1 million reported feeling significant financial stress, according to Vanguard Money Attitudes Survey 2023. In the bottom figure, bar charts break down the percentages of investors experiencing financial stress by demographic group, based on data from the Vanguard Money Attitudes Survey 2023. These demographics are gender (female 49%, male 40%), age (45% of those under 50, 43% of those 50 to 65, and 35% of those over 65), marital status (41% of those in a committed relationship, 48% of those no longer married, and 43% of those never married), number of dependents (39% of those with none, 41% of those with one, 43% of those with two, and 60% of those with three or more), household income (45% of those earning less than $100k, 48% of those earning $100k to $150k, 40% of those earning $150k to $250k, and 35% of those earning more than $250k), and financial assets (65% of those with less than $250k, 56% of those with $250k to $500k, 50% of those with $500k to $1M, and 29% of those with more than $1 million).

Financial stress manifests itself in different ways.

Our survey found that 57% of investors experience at least one of these symptoms.

Not all debt is bad, but debt causes stress for many people when it gets in the way of meeting financial goals.

While about one in three debt-free investors feel anxious about their finances, one in two investors with debt feels that way.

Two figures are shown in tandem—one headed “Investors holding credit card and student loan debt are more likely to report being stressed,” the other headed “Debt that hinders financial goals is the leading contributor to financial stress.” The top figure, labeled “Financial stress by type of debt,” uses donut charts to show that investors with credit card and student loan debt report the highest levels of financial stress (80% and 61% respectively). In addition, 56% of investors with auto loans, 46% of investors with a primary residence mortgage, 42% of investors with a secondary residence mortgage, and 32% of investors with no debt feel stressed. In the bottom figure, two circles within circles are used to illustrate that among investors reporting that debt poses a moderate to significant impact on them achieving their financial goals, 83% felt stressed, while among investors reporting that debt poses a minimal impact on them achieving their financial goals, 39% felt stressed. The findings in this figure are from Vanguard Money Attitudes Survey 2023.

Having a planning mindset is key to mitigating financial stress.

Focusing on what is under one’s control can really make a difference for investors when it comes to their finances and their peace of mind.

About Vanguard Money Attitudes Survey 2023

The survey is a comprehensive assessment designed to capture investor attitudes, financial and longevity literacy, and overall well-being. Conducted from October 17 to 25, 2023, the survey targeted a random sample of U.S.-based Vanguard IRA and 401(k) investors who maintained continuous investment activity between January 1, 2020, and December 31, 2022. Approximately 89% of the sample consisted of personal investor clients, while the remaining 11% were participants in employer-sponsored defined contribution retirement plans record-kept at Vanguard. Eligible investors were required to be over 21 years old, possess total Vanguard assets of at least $10,000, and have logged into their accounts at least once in the prior year. The overall sample included 4,010 investors, collectively holding approximately $3.5 billion in assets at Vanguard. The findings presented in this article are based on a subsample of 1,107 Vanguard IRA holders who were employed during the survey period.

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