AI Overview says financial worry is the state of anxiety, unhappiness, and stress caused by concerns about money. The concern includes where the money will come from, how to spend it, and how to manage it. Often, financial worry is a negative emotional state stemming from anxieties about financial matters. It is also called economic burden, economic hardship, financial distress, financial hardship, financial stress, and financial toxicity.
No matter how you see it, it remains a mixed bag for different people – what it means for one person may not be what it means for another. Its meaning depends on objective factors such as how much you earn along with subjective perceptions about what constitutes financial security in your environment.
Therefore, it may be correct to assume that people struggling to make ends meet worry more about money than those with savings and access to credit. But there are broader societal factors that also influence worry beyond income levels. For instance, the quality of healthcare systems and the effectiveness of social security programmes.
Despite their importance, especially for developing countries, financial worry and its determinants have received little attention from academics and policymakers. In fact, the World Bank’s Global Findex 2021 report is the first attempt to measure financial worry globally and thus is an essential step in filling the knowledge gap in the area.
The Covid-19 crisis extremely impacted the most vulnerable around the world. According to the World Bank, the pandemic pushed an additional 97 million people into extreme poverty in 2021 globally. During the pandemic, hundreds of millions found it challenging to meet their medical expenses. 60 percent of those surveyed in Nigeria either experienced or continue to experience financial hardship as a result of the pandemic.
Additionally in Nigeria, a quarter of all respondents reported that paying for healthcare ranked as their biggest worry. In contrast, only one in five respondents in high-income countries reported worrying about paying their medical bills.
These responses may partly reflect the quality and accessibility of local healthcare services in some countries. Concerns about medical expenses were also generally highest in sub-Saharan Africa (SSA) – where the pandemic tested the limited healthcare services. Better health system design and performance and more affordable healthcare would help alleviate some of these worries.
Today, Statista projects that over 93.7 million Nigerians could be living in extreme poverty, defined as living on a maximum of $1.90 per day. While a PwC report projects that at least 13 million Nigerians could be plunged into poverty in 2025 due to rising inflation, rising interest rates, and the depreciation of the naira, the National Bureau of Statistics indicates that 63 percent of people in Nigeria are multidimensionally poor.
Expanding financial inclusion – the access to and use of formal financial services by households and businesses – can also help reduce financial anxiety. Policymakers see it as a way to help families better protect themselves against shocks.
In many developing economies, sudden illness or an accident that forces a breadwinner to stay home can compound the impact of an external crisis – like with a loss of income. Availability of formal financial services like targeted insurance programmes can help vulnerable families drift over the immediate crisis.
More than two in five women (or 46%) say money issues have negatively affected their mental health, prompting feelings of anxiety, depression, sleeplessness and stress, according to a recent nationwide Bankrate poll. That number compares with 38 percent of men.
Among those who said money negatively impacts their mental health, women are more concerned than men about having enough emergency savings and paying for everyday expenses (at a respective 60% and 59% vs 53% each for men). Common financial situations are also more likely to trigger negative emotions for women than men, such as checking one’s bank account (52% of women vs. 46% of men) or facing unexpected expenses (73% of women compared with 64% of men).
Furthermore, studies show that 93 percent of women are stressed about money and that while 80 percent of men die married, 80 percent of women will die single. This means we need to find ways to better cope with financial stress, clear debt, and build financial independence, according to the poll.
The data confirm the regressive impact of diseases on the most vulnerable sections of populations.
Data from the survey also uncovered salient regional themes. In Nigeria, for example, 28 percent of adults are very worried about school expenses, which represent the biggest worry for 33 percent of adults in sub-Saharan Africa. By contrast, in South Asia, only 18 percent of adults rank school fees as a top worry. The high proportion of adults with school-going children in sub-Saharan Africa may partly explain this worry. It also reflects the high out-of-pocket costs associated with schooling in the region.
Financial inclusion has expanded in recent years – the Findex report finds that 3.3 billion people in developing countries had an account in 2021. It found that in Nigeria, 45 percent of those surveyed did have an account. However, only 8 percent of Nigerians surveyed reported ownership of a mobile money account.
The gap in financial worry between developed and developing economies remains. However, half of the adults in developing economies reported being very worried about one or more common financial expenses, whereas in high-income economies, only about 20 percent said the same.
Financial worrying impacts overall well-being and is linked with lower productivity and sub-optimal decision-making. It also points to gaps in the existing global effort toward building financial resilience. As a result, hundreds of millions in developing countries remain extremely unprepared to face economic shocks from emerging global challenges such as climate change. The findings from the Findex 2021 report underline the urgency of protecting them.
