Salary Finance Survey Reveals Inflation, Student Loans, Restrictive Housing Market, and Elimination of Child Tax Credit Leading to Increased Financial Stress in American Workers

The elimination of COVID programs, coupled with the dramatic rise in inflation, has financial stress at its apex

BOSTON–(BUSINESS WIRE)–#credit–As the country moves past one crisis and faces another, more American workers are dealing with financial stress, according to a survey by Salary Finance, the leading global provider of socially responsible financial products in the workplace. The elimination of COVID programs, such as student loan forgiveness and the enhanced child tax credit, the high cost of property and a record-high inflation worsened by the escalating war in Ukraine, are likely the root causes for the highest percentage of financial stress in the four years the company has conducted the survey, which often times leads to anxiety and depression.

According to “Inside the Wallets of Working Americans, the Fourth Annual Salary Finance Report”, 45 percent of working Americans experience financial stress, an increase from 42 percent the previous two years. Workers are running out of money faster: one out of five American workers runs out of money between paychecks. Of those experiencing financial stress, nearly 60 percent are living paycheck-to-paycheck.

While the survey found some encouraging signs this year that workers have more work/life flexibility to better manage through crises – work issues, health concerns and the state of relationships have improved year-over-year, indicating that businesses are becoming more empathetic post-COVID – American workers are struggling to effectively manage their finances through these turbulent times:

Three-quarters said that inflation has impacted their finances

More than two-thirds don’t have money set aside for emergencies

More than half have less cash on hand over the past year than in the previous

One out of two don’t have emergency savings and are anxious about it

Four out of 10 are unhappy with their current level of savings

As financial stress worsens, so does the downstream impact of it. More of those with financial stress are experiencing sleepless nights, distraction at work, troubled relationships with coworkers, and mental health issues than in previous years. More than 80 percent of those with financial stress experience anxiety, and nearly 60 percent experience depression. These mental health impacts impact every area of life, including work.

“American workers are at a crossroads,” Dan Macklin, CEO, Salary Finance, said. “ Just as there is some optimism about the decline in COVID cases, we’re watching the casualties of a war in Europe and crippling inflation that is impacting all of us globally. There’s evidence that employers are showing greater empathy toward workers, but we need more of it. Employers need to put programs in place that put a premium on work/life balance and put a greater emphasis on financial programs that get employees out of debt and into savings.”

The drivers: Inflation, Student loans, the housing market, and the end of the enhanced child tax credit

Identifying why there’s an increase in financial stress isn’t hard. American workers are facing a perfect storm of more money going out – and less coming in.

Inflation hit a four-decade high in January 2022, impacting the price of fuel, energy, cars, housing, and food. Seventy-six percent of working Americans said that inflation has impacted their finances over the past year. In addition, an inflated, highly competitive housing market has shown absolutely no signs of slowdown. Last year saw the largest annual rise in housing costs in over two decades. More than half of workers who don’t have a mortgage or own their home say it’s because they can’t afford to buy at this time.

As inflation and the housing market spikes, workers are also losing benefits that were born out of the pandemic. Nearly 60 percent of employees with student loan debt took advantage of the forbearance offered as part of the CARES Act legislation – and more than one-third won’t be able to afford to resume repayments this spring.

Similarly, many American workers were depending on the enhanced child tax credit program. In the study, 59 percent of parents with school-aged children reported receiving the credit. Forty percent of them said the money helped them build up their savings and more than 20 percent said it helped them afford regular bills and payments.

The impact: Depletion of savings, increased credit card usage, and cannibalized retirement savings

The combination of factors driving financial stress is staggering – and the impact is financially catastrophic for many American workers. This includes:

Lack of savings. Nearly 70 percent of American workers don’t have emergency savings – and almost one-third of employees also don’t have at least $1,000 in cash buffer or liquid savings.

Increased dependency on credit cards. One-third of credit-card holders surveyed consistently carry credit card balances month over month. Of those, more than 40 percent carry over $3,000.

Borrowing against retirement savings. This year’s survey uncovered a troubling rise in the number of employees who had withdrawn funds from their retirement savings in the past 12 months. In last year’s report, the number had shrunk to under 10 percent of employees, due in large part to stimulus payments, available forbearance programs, and the enhanced child tax credit. In this year’s survey, nearly 20 percent of employees surveyed had taken money out of their retirement savings.

Employer trust is trending downward – as businesses struggle to retain talent

The number of employees who say they feel their employer cares about their wellbeing declined year over year, from 63 percent in 2021 to 57 percent in 2022. Among those struggling with financial stress, 52 percent feel that their employer cares about their wellbeing.

While it’s not a significant drop, it comes at an inopportune time for employers who are dealing with The Great Resignation. The majority – six out of 10 – of employees looking to leave their jobs are financially stressed, putting the onus on employers to acknowledge the problem and put in place financial wellbeing benefits to help them.

“More than ever, employees are focused on getting out of debt and increasing their savings – and Salary Finance is helping them do just that ,” Macklin said. “In a separate customer survey, three-quarters of employees using Salary Finance reported decreased financial stress; furthermore, those that had no emergency savings decreased from 78 to 38 percent and those behind on bills went from 50 to 19 percent. These improvements show what can happen when businesses educate themselves on their employees’ financial stress and put the right programs in place to support them in their financial goals.”

The report, which can be downloaded for free here, also includes insights from The Motley Fool Foundation on obstacles to building long-term wealth, and from Brella Insurance on healthcare costs and medical debt.

About Salary Finance

Salary Finance’s mission is to improve the financial health of working Americans by providing access to socially responsible financial products in the workplace. When employees can access affordable credit, reduce bad debt, and increase their savings, they’re happier and more productive at work, and more likely to achieve long-term financial stability. Employers benefit from improved retention and engagement, at no additional cost. Our award-winning technology platform enables us to offer better, inclusive financial products such as high-interest savings accounts, access to affordable credit, and personalized financial education. Salary Finance is a United Way Worldwide corporate partner and works with over 600 of the world’s leading employers. Salary Finance is a Founding Member of Conscious Capitalism’s Senior Leader Network, and a member of the American FinTech Council. To learn more, please visit



Phil LeClare

Public Relations

Salary Finance