Second annual Mental Wealth survey explores trends surrounding the impact of financial stressors on mental health, finds 93% of respondents are taking action to regain control of their finances
New York, NY — October 20, 2022 — More than 68% of student debt holders agree that making progress on their student loan debt would improve their mental health, and almost half (46%) say paying off debt is their biggest financial goal for 2023, according to an annual survey commissioned by Laurel Road, a digital banking platform and brand of KeyBank with specialized offerings for healthcare and business professionals.
The survey, which polled 1,000 U.S. adults, explores the link between mental health and financial management amid economic uncertainty. Nearly one in four surveyed Americans hold student loan debt, including 16% with federal student loans potentially eligible for the recent student loan forgiveness. Of those polled with student loan debt, more than half are already behind on their financial goals and over three in five debt holders often feel like they must make financial sacrifices to make their student loan payments on time. Amidst this background, 88% of respondents are concerned with how a potential recession and rising inflation will impact their personal finances.
However, many student loan holders (42%) have continued to make progress on paying down debt during the federal student loan holiday, as well as a smaller proportion who never stopped paying (19%). People are eager to reap the benefits of student loan forgiveness, with plans already in place for how they will make the most of the extra money in their wallets to increase their overall mental wealth. More than a third will put it toward their remaining student loan debt, with just as many are planning to use the money to pay down other debt. Additionally, one-third of respondents plan to put it towards savings or investments.
“The landscape of debt, and especially student loan debt, has changed dramatically just in the last few months. We hear questions everyday from student loan borrowers on how they should now think about their student loans. We are working to provide resources, guidance, and support to tackle their toughest financial challenges and improve their mental wealth. As options for paying off debt become more complex, we are offering debt consultations and Public Service Loan Forgiveness management through GradFin, a group of experts who provide personalized solutions and advice for those that need it most. This is consistent with our mission to provide financial peace of mind to all our members throughout their journey,” said Alyssa Schaefer, General Manager & Chief Experience Officer at Laurel Road.
Despite Facing Increased Financial Stressors, Young Americans Are Preparing for the Future
Gen Z and millennials are continuing to feel their finances impacting their mental health and overall wellbeing. Nearly four in five survey respondents under 40 identified experiencing negative consequences due to financial stress, an increase from the 72% of Americans under 40 who said managing their finances strained their mental health in 2021. However, a clear majority agree they would feel less stress if they had more control over their finances (55%), and most respondents are beginning to take action to relieve the pressure of ongoing instability (93%).
This builds on trends from 2021, which found that a majority of young Americans (79%) felt they would be less stressed about their financial situation if they were more educated on how to achieve financial wellness – a similar majority noted that they would feel more in control of their finances by having a financial plan and that talking to others about their financial situation would help their anxiety.
Americans Are Taking Action to Regain Control on the Path Towards Financial Security
While the majority of respondents (76%) don’t feel financially stable, more guidance and resources could help many achieve their goals and put them back in control. Respondents identified the ability to save more money, build their retirement savings, and find new tools to budget their money as top ways they could feel more in control of their finances.
With many respondents feeling the pressure to keep money in their bank accounts, less than a third believe their current bank or financial institution is helping them achieve financial stability. While a majority of respondents are comfortable discussing their financial situation with friends and family, only 11% have sought professional financial advice. Emotional concerns were a critical inflection point in terms of reaching out for support as over a quarter of respondents are simply too embarrassed of their current financial state to discuss it openly, and younger Americans are twice as likely to be anxious around being stigmatized for seeking help.
“People want professional guidance not only to help with tactical next steps for their financial journey, but also to understand the side effects of financial stress and how build a strong foundation around mental wealth,” said Aja Evans, Licensed Mental Health Counselor (LMHC) and Financial Therapist for Laurel Road. “Laurel Road places an intrinsic value on achieving financial wellness and continues to bolster its portfolio to offer members the necessary resources required to approach and understand their financial situation with ease.”
With the Holidays and New Year Around the Corner, Americans Prioritize Savings & Financial Resolutions
This holiday season will be shaped by the current financial reality Americans are facing as survey respondents say they are focused on saving money now more than ever (84% compared to 66% in 2021). As a result, people plan to save money this season by talking with family and friends about less costly or more meaningful gifts to receive (27%), using hacks like credit card rewards points (27%), and even opening new checking or savings accounts to earn sign-up offers (13%). However, some budgeting will require more sacrifice — including cutting back on travel (28%) and dipping into savings (20%).
It’s clear that Americans have big plans for 2023 and beyond and are planning to prioritize their financial security in the new year. Respondents’ top financial resolutions for 2023 include paying off debt, improving their credit score, and improving their relationship with money. As more people aim to take back control of their finances, setting clear goals and next steps is the first bridge to cross on the path towards financial freedom.
To discuss trends surrounding personal finances and the impact on overall wellbeing, Laurel Road will be bringing together personal finance and mental health experts for the Managing your Mental Wealth with Laurel Road: The Path to Financial Resistance event on October 27. Follow Laurel Road on Instagram for further updates.
This survey was conducted by Wakefield Research among 1,000 nationally representative US adults, between September 7th and September 16th , 2022, using an email invitation and an online survey. The data has been weighted to ensure an accurate representation of nationally representative US adults. Results of any sample are subject to sampling variation. The magnitude of the variation is measurable and is affected by the number of interviews and the level of the percentages expressing the results. For the interviews conducted in this particular study, the chances are 95 in 100 that a survey result does not vary, plus or minus, by more than 3.1 percentage points from the result that would be obtained if interviews had been conducted with all persons in the universe represented by the sample.
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 physicians 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. In spring of 2022, Laurel Road launched Loyalty Checking, the first checking account designed with nurses in mind, furthering the company’s commitment to healthcare professionals. 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. © 2022 KeyCorp® All Rights Reserved. Laurel Road is a federally registered service mark of KeyCorp.