Key findings
- Half of Americans (50%) are more stressed financially than a year ago, with 70% of Americans just managing, struggling, or falling behind
- Low savings and debt are the leading contributors of financial stress for Americans
- Americans are pessimistic about the U.S. economy as they face rising prices for groceries and transportation
- In addition to cutting expenses, Americans are navigating rising prices by tapping into their savings, increasing their income, or taking on debt
- Four in ten (39%) Americans have used a credit card to pay for groceries or household essentials due to affordability issues
- Affordability is a leading issue for upcoming elections, and 38% of Americans blame the federal government for the crisis
Half of Americans (50%) are more stressed financially than a year ago, with 70% of Americans just managing, struggling, or falling behind
Only five percent of Americans describe their current personal financial situation as “thriving”, with one in four (25%) feeling “comfortable”. The largest group of Americans, at 41%, are “managing” to get by, followed by 21% who are “struggling” financially, and 9% who feel like they are “falling behind”. Millennials are more likely than all other age groups to feel like they are falling behind (15% vs. 8% of Gen Z, 9% of Gen X). More than half of Americans (59%) consider themselves as living “paycheck-to-paycheck”, with Millennials also more likely to self-identify as such (74% vs. 65% of Gen Z, 63% of Gen X).
Low savings and debt are the leading contributors of financial stress for Americans
- 41% cite not having enough savings as a source of financial stress
- 28% cite credit card debt
A quarter of Americans cite auto insurance (24%) and medical bills (24%) as financial stressors, while a small but significant percentage cite their mortgage (17%), student loans (16%), home insurance (15%), and auto loans (14%).
Americans are pessimistic about the U.S. economy as they face rising prices for groceries and transportation
More than half (54%) of Americans think the U.S. economy will decline over the next year; only three in ten (28%) expect things to improve, while 18% believe things will remain about the same. Similarly, 56% of Americans say everyday life has become less affordable for their household compared to one year ago, citing the rising prices of groceries (76%), gas and transportation (71%), utilities (49%), health care expenses (37%), insurance (35%), and rent or mortgage (32%). They are also reducing spending or stopping purchasing across many categories due to rising costs, including:
- Dining out or delivery apps (65%)
- Certain grocery items, such as brand name or premium goods (59%)
- Clothing (51%)
- Home goods (47%)
- Personal care services (42%)
- Gym memberships (22%)
- Alcohol (21%)
- Rideshares (14%)
- Child care (8% among parents with children under 18)
In addition to cutting expenses, Americans are navigating rising prices by tapping into their savings, increasing their income, or taking on debt
- 49% have reduced discretionary spending
- 40% have dipped into their savings to cover daily expenses due to rising costs
- 37% have delayed a major purchase
- Some are hoping to increase their income to offset rising costs:
- 30% are taking on extra work, a side hustle, or a second job
- 29% are looking for higher paying jobs
- 14% asked for a raise or higher salary
Four in ten (39%) Americans have used a credit card to pay for groceries or household essentials due to affordability issues
- 31% have done so to pay for transportation costs, such as gas, public transportation, or for car maintenance
- 21% have used a credit card to pay for utilities due to affordability concerns
- 20% have paid for medical expenses using a credit card
Americans are also relying on debt or loans to pay for a potential $1,000 emergency expense:
- Only 40% have enough in their checking or savings account to cover the expense
- 20% are depending on their credit card to cover the expense
- 18% would not be able to pay for it at all
- Less than 10% would take out a loan from a bank (2%) or from friends and family (5%).
- 14% would explore payment plans
One in four (23%) adults say homeownership is completely out of reach for them
Only one in ten (11%) Americans expect to be able to purchase a home in the next five years; one in five are cautiously optimistic (19% maybe), while one in four (23%) say it feels impossible. Despite the pessimism over homeownership, only 4% of Americans say they are not interested in owning a home.
For those who are not currently homeowners or in a position to currently purchase a home, optimism towards the prospect of homeownership varies:
- 20% are confident they can purchase a home within the next five years
- 32% think it may be possible
- 40% feel home ownership is impossible
- 8% are not interested in home ownership
Affordability is a leading issue for upcoming elections as rising food and energy prices are Americans’ biggest economic concern
One in four (23%) Americans say that affordability is the most important issue for them in upcoming elections, while more than half (54%) say it is one of the top issues. Only 24% say that it is a minor issue (12%) or not an issue (11%). Rising food and energy prices are the leading economic concern for Americans (74%), ahead of long-term economic stability (58%), health care costs (53%), housing affordability (50%), job security and wages (46%), interest rates (34%), and stock market volatility (27%).
The federal government is seen as most responsible for the current affordability crisis for Americans
Four in ten (38%) Americans say that the federal government has the most responsibility for current affordability challenges, more than double the percentage who say there is no single group responsible (15%) or attribute the challenges to global events (13%). More than half of Americans who identify as Democrats blame the federal government (55%), while only 23% of Republicans point a finger at the current administration.
Paying down credit card debt, increasing savings, and covering living expenses are the top expected uses of tax refunds
One in four Americans who expect a tax refund this year plan to use their refund to pay down credit card debt (23%) or put it in savings (23%), and 20% expect to use their refund to cover living expenses. Less than 10% plan to use their refund to splurge on purchases (3%), make a major purchase (4%), pay down non-credit card debt (7%), or invest it (3%).
