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Gen Z and Millennials Combat Financial Stress By Building Financial Habits to Achieve Mental Wealth

New survey finds link between financial wellness and mental stressors among young Americans, with notable challenges this holiday season and...

Published December 07, 2021

New survey finds link between financial wellness and mental stressors among young Americans, with notable challenges this holiday season and as student loan forbearance ends

New York, NY — December 7, 2021 — Nearly three in four (72%) Americans under 40 say managing their finances is a strain on their mental health, according to a new survey from Laurel Road, a digital banking platform of KeyBank with specialized offerings for healthcare and business professionals.

The survey, which polled 2,000 Gen Z and millennial Americans, explores the link between financial management and mental health within this group, finding that 62% of respondents feel constantly stressed about their finances. Respondents noted some of the reasons they feel this way, with the added stressor of making and following a monthly budget and getting anxious when checking their bank accounts (65%) and credit card statements (70%).

The good news is this stress can be managed by building greater “mental wealth”, which is the impact having more financial control and confidence has on mental health. The findings show that young Americans know this, as 79% feel they would be less stressed about their financial situation if they were further educated on how to achieve financial wellness. Additionally, over three-quarters (76%) of Gen Z and millennials also feel they would be less stressed if they had more control over their finances by having a financial plan, and 65% feel that talking to others about their financial situation helps too.

“Financial stress and anxiety are incredibly common feelings among Gen Z and millennials, many of whom are facing new challenges in light of the pandemic, and we’re seeing firsthand that this group is interested in taking the steps needed to alleviate stressors and strengthen their finances and mental health,” said Alyssa Schaefer, General Manager & Chief Experience Officer at Laurel Road. “Importantly, we see that cultivating ‘mental wealth’ is clearly a priority for many individuals as they continue to focus on increasing their savings, creating a financial plan and building financial wellness — all of which will help to get them there.”

Saving Money is Key to Creating Confidence and Easing Stress 

There are other factors influencing Gen Z and millennials on their road to achieving mental wealth, one of which is making comparisons to others, as 69% of respondents feel like other people their age are more focused on their financial future than they are, which is even more true for millennials (74%) than Gen Z (65%).

Importantly, this group has identified ways to deal with their stressors, noting that having a student loan repayment plan (34%), roadmaps outlining debt repayment (41%), a better understanding of investment options (48%), and the ability to save more money (52%) would help them have their finances under control.

To that end, this group is also changing their approach to personal finance as they are continuing to focus on saving more each month (44%), setting aside their pandemic savings for the future (36%) and gearing up to pay off more of their student loans (33%).

Young Americans Are Anxious, but Prepared for Student Loan Forbearance to End

The survey also asked respondents about the role their student loans play in their financial stress and mental health. Of those polled with student loans (approximately 1,300 respondents), 87% said they often have to make financial sacrifices in order to make their student loan payments on time. That said, respondents did note that refinancing their student loans (36%) and consolidating their student loans (34%) would help them make fewer financial sacrifices and save money long-term.

When it comes to student loans and mental health, one in five respondents with federal student loans (just over 700 respondents) said they’re feeling anxious about the anticipated end of the federal forbearance period in early 2022. However, over three-quarters (77%) do feel prepared to start making their payments again. This is significantly higher among millennials, where 84% feel confident compared to 71% of Gen Z respondents.

“As the student loan forbearance period ending fast approaches, it’s important that Gen Z and millennials know what options are available to help them to retain and build their future savings,” Schaefer added. “There are many options available to chip away at debt by making small monthly payments, or refinancing student loans to secure a lower interest rate. These choices will ultimately provide more financial freedom to navigate stress and allow for additional money to be spent on supporting self-care or achieving larger savings goals.”

With the Holidays Around the Corner, Mapping Out Expenses May Relieve Stress

While the student loan forbearance period is fast approaching, the holidays are even sooner and top of mind for many. In fact, two-thirds of Gen Z and millennials (66%) are stressed about overspending this holiday season. As a result, they are planning to create a budget to manage spending (38%), talking to family and friends about alternative gifts (37%), opening a new checking or savings account to get sign-up offers (35%) and using credit card rewards points to offset spending (35%).



This random double-opt-in survey of 1,000 Gen Z and 1,000 millennial Americans was commissioned by Laurel Road between October 22 and October 27, 2021. It was conducted by market research company OnePoll, whose team members are members of the Market Research Society and have corporate membership to the American Association for Public Opinion Research (AAPOR) and the European Society for Opinion and Marketing Research (ESOMAR).


About Laurel Road

Laurel Road is a digital banking platform and brand of KeyBank that provides tailored offerings to support the financial wellbeing of healthcare and business professionals. Laurel Road’s banking and lending solutions, including High Yield Savings℠ Account, Student Loan Cashback℠ Credit Card, Student Loan Refinancing, Mortgages, Personal Loans and more, provide our members with a simplified, personalized experience that helps them better navigate their financial journey and achieve life’s goals. Additionally, Laurel Road has reimagined banking and financial management for physician and dentists through Laurel Road for Doctors, a tailored digital experience made up of banking, insights and exclusive benefits to provide the financial help and peace of mind they need through each career stage. Since 2013, Laurel Road has helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $9 billion in federal and private school loans. For more information, visit http://www.laurelroad.com. Laurel Road is a brand of KeyBank National Association. All products offered by KeyBank N.A. Member FDIC. NMLS # 399797. Equal Housing Lender. © 2021 KeyCorp® All Rights Reserved. Laurel Road is a federally registered service mark of KeyCorp.


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