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For many folks, financial matters and mental wellness are joined at the hip. Feeling good about your personal economy? There’s a better-than-average chance you’re confident and relaxed in other areas of life. Unfortunately, the reverse is true.
Coming off Mental Health Awareness Month in May, it’s worth remembering financial stress doesn’t take a break and that stress has consequences. A recent Acorns survey indicates 45% of respondents grapple with anxiety attributable to financial pressure and more than half are frequently (daily) preoccupied about money matters.
The survey contains a slew of nuggets that aren’t all that surprising and plenty advisors should pay attention. In the former category, respondents with negative net worths have anxiety rates of 65%, but for those with a net worth of $800,000, the anxiety clip plunges to 24%. Also in the not-so-surprising camp is the 33% saying they lose sleep over financial matters.
Then there’s the perceived drag regarding conversations about money. Twenty-two percent of those queried by Acorns told the fintech company talking about finances with their romantic partners creates arguments and stress. It’s no wonder financial chats are still considered taboo in some personal relationships.
Speaking of Taboo…
As certain as the day is long, people lie about money and the situation may be getting worse thanks to social media “finfluencers.” That may be one reason – and this isn’t coming down on this age bracket – why millennials are big money fibbers, particularly when experiencing financial stress.
“73% of Millennials have lied about their finances. Only 11% have never hidden financial truths,” according to Acorns. “48% of people with a net worth over $800k still lie about money often or very often.”
Underscoring reasons for millennials to consider working with advisors are multiple factors, including the sheer expanse of their financial fibs and how those tales affect their daily lives. Millennials, and the rest of us for that matter, lie about debt, financial struggles in broad terms, income and spending habits. Those are bad roads to traverse because those lies, as innocent as they seem, lead to other negative behavior.
“1 in 4 respondents (25%) avoids hobbies or social activities due to money stress,” adds Acorns. “Social withdrawal is highest in the $100k–$120k income bracket (33%), suggesting that ‘feeling broke’ is about perceived adequacy, not just income.”
More Reasons for Advisors to Be Involved
As I often say in this space, advisors aren’t therapists or psychologists, but they can be forces for good on the financial stress and fibbing front. That’s even more true for advisors who are fresh on the scene and those willing to work with clients with smaller account sizes.
Consider the following. Acorns points out a third of respondents to the survey have never opened an investing account and 50% of households with income below $30,000 don’t even bother investing.
“The #1 and #2 reasons for non-participation are tied: Lack of Funds (32%) and Lack of Knowledge (32%),” according to Acorns.
Bottom line: advisors willing to work with clients with small grubstake and those new to investing can create valuable long-term relationships while potentially alleviating some stress for those clients.
Related: Financial Stress Is Hurting Women’s Health — Advisors Can Help