According to the American Psychological Association, financial concerns are the single biggest source of stress in the workplace. Not deadlines. Not difficult colleagues. Money. And yet, as Belgin Okay-Somerville, Eva Selenko and I argue in a new book chapter, psychological research on financial insecurity remains remarkably thin given how central it is to people’s working lives.
The chapter, “Cents and Sensibility,” is our attempt to pull together what’s actually known: who experiences financial insecurity and why, how it gets under people’s skin psychologically, and where the field’s research habits are quietly leaving huge groups of workers out of the picture.
What we’re actually talking about
Financial insecurity is the perception that your financial resources won’t cover your current or future needs. That word “perception” matters. It’s related to, but distinct from, financial deprivation (the objective hardship) and pay dissatisfaction (which can exist even when someone isn’t insecure at all, if they have savings or household income to fall back on). Roughly a quarter of people in developed countries report struggling to make ends meet, and the share is considerably higher in developing economies and places affected by political conflict.
Who’s most exposed
One of the more useful parts of pulling together this literature is seeing how unevenly financial insecurity is distributed, and how counterintuitive some of the patterns are.
Take age. The stereotype is that older workers, especially so-called baby boomers, are financially comfortable. The evidence says otherwise: financial insecurity is actually more common among older workers globally than younger ones, particularly where social protection is weak. That helps explain what’s been called the “silver tsunami,” workers staying in the labor market well past retirement age, not always by choice.
Take gender. Women are more likely to experience financial insecurity than men, a pattern that traces back to the gender pay gap, the gender pension gap, and the fact that unpaid caregiving work, which carries real costs to earnings and career progression, still falls disproportionately on women, especially those over 50.
Take work design itself. Jobs with unpredictable schedules, irregular hours, or performance-based pay carry more financial insecurity than stable salaried roles, independent of the actual income level. And employee benefits, the thing organizations often reach for first, turn out to be an inconsistent fix: for lower-income workers in particular, there’s evidence that income volatility and precarious conditions can undermine whatever protective effect the benefits were supposed to provide. A financial wellness program doesn’t fix an unpredictable schedule.
Five ways it gets under your skin
The chapter walks through the psychological mechanisms that explain why financial insecurity does so much damage, and while some overlap with mechanisms I’ve written about here before (cognitive depletion, stress, identity threat), two are worth calling out specifically.
The first is shame. Financial insecurity often triggers a sense of falling short of a social standard tied to identity, competence, and reliability. People conceal financial difficulty to avoid being seen as less capable, which is part of why uptake of employer financial support programs is often lower than you’d expect: the program requires admitting the problem out loud.
The second is a shift in what motivates people at work. Drawing on self-determination theory, the chapter shows that as financial insecurity rises, people become more oriented toward controlled, extrinsic motivation (chasing the paycheck) and less oriented toward the kind of identified or intrinsic motivation that tends to sustain good work over time. In plain terms: financial insecurity doesn’t just make people unhappier, it can quietly change why they’re showing up at all.
Where the research itself falls short
The section I’d most want colleagues to read is the critique of how this research gets done in the first place. Most psychological research, this chapter included by necessity, is built on WEIRD populations (Western, Educated, Industrialized, Rich, Democratic) and what’s been termed POSH samples (Professionals, in Official work, Safe from institutionalized discrimination, in High-income countries). That’s a narrow slice of the workforce to be building theories of financial hardship from.
We argue for four shifts. An intersectional lens, since age, gender, health, and caring responsibilities compound rather than simply add up, often producing a self-reinforcing downward spiral where reduced performance leads to fewer opportunities, which deepens the insecurity that caused the reduced performance in the first place. A relational lens, since almost nothing is known about how financial insecurity plays out between colleagues, in teams, or under a financially insecure manager. A multi-level lens, since the same financial insecurity means something different depending on whether your colleagues are wealthier or in the same boat, and whether you work in a country with strong social protection or none. And a dynamic lens, since most research treats financial insecurity as a stable trait, when in reality it fluctuates with life events, and coping strategies like overtime or a side gig that help in the short term may not hold up over the long term.
What organizations and policymakers can do
On the organizational side, the chapter’s recommendations start with reward strategy: reviewing pay and benefits specifically through the lens of financial security, not just competitiveness, with living wage schemes as one concrete example already in use. It also means training line managers to recognize the behavioral signs of financial strain, since changes in performance or engagement are often the first visible signal. And it means investing in financial capacity building, though with the same caveat as the education and coaching interventions I’ve discussed before: these only work if they’re not asked to compensate for pay or hours that are themselves inadequate.
At the policy level, two things stand out. Social protection systems remain one of the most cost-effective interventions available. The ILO estimates a return of more than $1.50 for every $1 spent. And financial technology, often framed as a democratizing force for financial inclusion, cuts both ways: without the digital skills and access to use it, FinTech can just as easily widen the gap it’s meant to close.
A companion piece
This chapter sits alongside “The Road to Dignity,” the other financial stress chapter I wrote about recently. Where that one made the moral case for treating financial well-being as a matter of workplace dignity, this one is closer to a field report: what we know, who we’ve been studying, and who we’ve been leaving out. Read together, they make a similar point from two directions. Financial insecurity is not a private failing to be managed with a budgeting app. It is a structural condition that psychology, and organizations, still have a lot of catching up to do on.
Okay-Somerville, B., Schreurs, B., & Selenko, E. (2026). Cents and Sensibility: Financial Insecurity and Its Impact on Vocational Behaviour. In N. A. Fouad, B. I. J. M. van der Heijden, & D. Scholarios (Eds.), Research Handbook on Vocational Behavior. Edward Elgar Publishing. https://www.elgaronline.com/edcollchap/book/9781035322633/chapter20.xml