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A new study by the American Psychological Association (APA) confirms that anxiety over money is the leading cause of stress among the majority of Americans, and that the level of money anxiety fluctuates with the state of the economy.  The study, Stress in America published by APA  in February of 2015, shows that in 2007, which was the first year of this study, 74 percent of Americans cited money as the leading cause of stress.  The number of Americans reporting money anxiety as their leading cause of stress peaked in 2010 at 76 percent in the aftermath of the Great Recession, and gradually declined to 64 percent in 2014 as the economy improved.

The findings of the APY study validate the assertion of the Money Anxiety Index that financial stress is wide spread among Americans and that the level of money anxiety fluctuate with the economy, hence making money anxiety a reliable barometer of the economy.  The findings of the APA study mirror the fluctuation in the Money Anxiety Index.  In 2007, the Money Anxiety Index stood at 62.3; climbing up to 96.2 in 2010 and gradually declining to 67.3 at the end of 2014 due to improved economy.   

The Money Anxiety Index measures consumers’ level of financial worry and stress.  Historically, the Money Anxiety Index fluctuated from a high of 135.3 during the recession of the early 1980s, to a low of 38.7 in the mid 1960s.  The Money Anxiety Index is highly predictive.  It signaled the arrival of the Great Recession over a year prior to the official declaration of the recession in December of 2007.   

Dr. Dan Geller is a financial behavior scientist exploring the link between the level of financial anxiety and the savings and spending habits of consumers.  In his book, Money Anxiety, Dr. Geller uncovers the mystery of the financial mind, explaining why we hate to lose more than we love to win and why we spend when safe and save when scared.

 


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