Money Worries: Examining Demographic Difference in Financial Anxiety

Abstract

We identify key demographic groups that suffer the most from financial anxiety. Identifying demographic groups that suffer the most from financial anxiety will aid in finding policy avenues to improve financial outcomes. With data from the 2018 National Financial Capability Study and Ordinary Least Square regressions, we find that females and those individuals with some college are the most financially anxious. In addition, the separated or divorced worry more than the married, those with children worry more than the childless, and White non-Hispanics worry more than other racial/ethnic groups. Analyses of gender subsamples show that black non-Hispanic males worry more than White non-Hispanic males, while the result of the female subsample is the opposite. The findings of this study have major policy implications, and more research is needed to determine how to best measure financial anxiety and solutions to reduce financial anxiety. Financial counseling and planning professionals can target groups that are most financially anxious. We recommend that financial education include a curriculum to educate and prepare individuals for financial anxiety and its implication on financial outcomes.