Why are so many people fretting over money?

The British consumer may be more cash-strapped than suspected. The Daily Mail reports that on average people spend three hours a week fretting over cash:

Struggling consumers spend the equivalent of one week a year worrying about money … says a study.With families facing the toughest squeeze on living standards since the ’20s, it found the average person spends three hours and 15 minutes a week fretting over finances. …The findings were published today in the first of a series of Quarterly Consumer Reports into how people in Britain are coping with the financial downturn.

And how are people coping with the financial downturn? You guessed it—by making the worst financial mistake possible:

The Which? Quarterly Consumer Report … says more are being forced to take on new forms of debt to make ends meet. …Which? executive director Richard Lloyd said: “Consumers in Britain are going through the tightest squeeze in their living standards since the 1920s.”Many consumers are clinging to the edge of a financial cliff with savings at rock bottom and personal debt levels sky high.”Shocking numbers of people say they are forced to take on new forms of debt just to make ends meet, and many more would not cope with unexpected shocks to their incomes or household bills.” Those aged 18 to 29 have borne the brunt …. Almost half in this age group run out of money every month.

Turning to debt is almost guaranteed to make your financial problems worse. The Daily Ticker reports that 30 percent of Americans are not prepared for a financial emergency:

Nearly three in ten Americans have no money saved for a financial emergency, according to a recent survey by Bankrate.com.Twenty percent of people polled said they have less than three months salary saved up for an unexpected financial crisis.

According to the report, only 42 percent—less than half of Americans—are financially prepared for the proverbial rainy day.

What’s the biggest money problem for these people? According to budgeting expert Steven Simth, the majority of Americans live “pay check to pay check,” and the recession and bleak jobs market has exacerbated the problem.

Since America’s economy is largely consumption based, an economic recovery is unlikely as long as consumers are trying to reduce their debt levels. More than likely, another “official” recession will be here soon.

If finances have got you down, or you are one of the 30 percent without an emergency fund, you need to read Solve Your Money Troubles! and The Financial Law You Can’t Afford to Ignore.