Social Isolation Isn't Just Lonely — It May Be Holding You Back Financially
Loneliness, on the surface, sounds like a personal or emotional issue, something wholly separate from jobs, money, finance and financial stability. New research, though, has shown that for many Americans, especially younger adults in Gen Z, social isolation is quickly and quietly becoming not just an emotional disadvantage, but an economic one as well.
Here's how isolation is making finances almost as distressing as the emotional toll.
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Americans Are Becoming More Socially Isolated
A recent American Enterprise Institute survey indicated that only around 25% of adults aged 18 to 29 speak with their own neighbors even just a little each week, a level of communication that’s down from 59% in 2012, per Fortune. It’s a shift that reflects broader declines in America’s everyday social interactions; we’re having fewer conversations, less shared spaces and a dwindling number of relationships — all things that were once the backbone of communities.
This social erosion doesn’t just impact a community; it can carry financial consequences, too.
Loneliness and Social Isolation Can Cost You
A 2026 Gallup poll has found that Americans who lack a reliable connection with neighbors (as in, neighbors you can turn to in a crisis or times of hardship) are much less likely to feel in control of their financial futures. In fact, a person without strong ties to their community can be 16%-22% less likely to have confidence about their ability to determine the major factors in life than those with a tight social circle.
According to Fortune, that confidence and sense of control is more important than one might think.
Feeling financially in control often drives how we budget, how we save, how we apply for jobs and how we take risks like moving to a new city or starting a new business. When that control and confidence erodes, it can build financial stress. Even worse, financial stress can lead to even more loneliness.
“For many, financial stress is shameful,” said Tom Murray, PhD., assistant professor at Grand View University’s counselor education faculty, adding that “it limits their life choices, which may inherently contribute to social isolation. That isolation directly limits their economic mobility. The more isolated they are, the more likely they are to lose access to the informal economies that previous generations relied on, like shared resources, organic career networking and emergency emotional support.
"Furthermore," he said, "loneliness is a massive trigger for emotional spending as people try to buy the comfort they are missing from human connection.”
How To Combat Isolation
“People in general and younger folks in particular often associate socializing with spending money,” Murray told MoneyLion. “We need to help them shift from consumer-driven hangouts to connection-driven ones. Since younger people are already more likely to question consumerism, this might not be too far of a stretch. Organizing a neighborhood potluck, starting a local skill swap or hosting a game night builds community capital without draining financial capital. To make this happen, however, they'll have to put down their phones!”
Murray said that a major reason people isolate is because they feel behind financially and are embarrassed to admit it.
“Normalizing transparent, judgment-free conversations about money with friends strips away that shame,” he said. “When people express vulnerability, it breeds connection and shared financial realities can actually bring people closer together.”
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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