SimpleImages / Getty Images
The New Year is just around the corner, and many Americans fear their financial situation will deteriorate.
Almost half of Americans report having more financial stress now than they did at the start of 2025.
Rising everyday costs, low income, and job insecurity are the top reasons cited.
Consumer sentiment has fallen sharply over the past year, as unemployment has risen and inflation remains above the Fed’s target of 2%.
2025 was a year of change for the U.S. economy—tariffs were imposed on goods imported from around the world, the unemployment rate ticked upward, and AI companies bolstered stock market performance.
For Americans, however, some of these changes were a source of stress.
A new survey by Allianz, a life insurance company, finds that 48% of Americans report being more stressed now than they were at the beginning of the year.
As you head into the New Year, consider doing a review of your finances this year: how much money did you earn and spend? If you spent more than you earned, find ways to cut costs and consider generating additional income, such as through a side hustle. If you’re worried about losing your job, try building up your emergency fund with three to six months’ worth of expenses.
Among that group of Americans, some of the top reasons for being stressed about finances were the cost of everyday expenses (54%), low income (46%), high debt (35%), and a lack of job security (33%).
The most recent Consumer Sentiment Survey from the University of Michigan also indicates that Americans are feeling worse about the economy now than they did a year ago.
In December 2025, the headline index was 52.9, down more than 28% from a year earlier.
“Despite some signs of improvement to close out the year, sentiment remains nearly 30% below December 2024, as pocketbook issues continue to dominate consumer views of the economy,” said Joanne Hsu, Surveys of Consumers Director, in the release.
As of November 2025, the unemployment rate was 4.6%, the highest since the end of the COVID-19 pandemic in September 2021.
And while inflation has eased since 2021, it still remains stubbornly high, above the Federal Reserve’s 2% goal.
The November inflation report from the Bureau of Labor Statistics indicated that inflation had slowed to 2.7%, down from 3% in September. However, economists note that this reading could have been distorted by the government shutdown, which affected the data collection practice.
Read the original article on Investopedia