Financial well-being is falling across many demographics, and more Americans are struggling to keep up with everyday expenses. This trend is crucial for the credit and collection industry, as it may impact consumers’ ability to repay debts. Overall financial stability declined from 2023 to 2024, according to the Consumer Financial Protection Bureau’s “Making Ends Meet 2024” report. Financial well-being, as measured by the CFPB’s scale, has fallen significantly, and the share of consumers experiencing financial difficulties has increased.
- Financial well-being: The CFPB’s financial well-being score averaged 48.7 in 2024, down from 51.0 in 2023. This is the lowest level since 2019, highlighting the financial strain many consumers are currently facing.
- Difficulty paying bills: 43% of households reported struggling to pay at least one bill in the past year, up from 38% in 2023. Renters, Black and Hispanic consumers, and those with student debt are especially affected.
- Income security: Only 42% of households could cover their expenses for a month or less if they lost their main source of income — up from 40% in 2023. Financial vulnerability is notably higher among lower-income families, renters, and minority communities.
By the numbers:
- 63% of Black consumers and 51% of Hispanic consumers reported having difficulty paying bills, compared to 38% of non-Hispanic white households.
- 60% of renters reported financial challenges, compared to 32% of homeowners.
- 22% of households could cover expenses for less than two weeks if they lost their main income source, indicating widespread vulnerability to financial shocks.
Zoom in: Income variability continues to be a major issue. In 2024, 31% of households reported that their income varied somewhat or a lot from month to month. This makes it harder for families to plan and cover essential expenses, especially when unexpected costs arise.
- Black and Hispanic consumers are particularly affected, with 40% and 43% respectively reporting income variability.
What’s next: With high inflation, housing costs, and rising interest rates, the financial outlook remains uncertain. These factors may continue to influence consumers’ ability to repay debts and could increase the need for flexible repayment options and proactive communication from creditors.
