A growing number of consumers are feeling pessimistic about their financial futures, even as a majority remain optimistic overall. According to TransUnion’s Q2 2025 Consumer Pulse study, 27% of consumers said they were pessimistic about their household finances over the next 12 months, which represents the highest figure recorded since tracking began in 2021. That’s up from 21% just six months ago. Yet, optimism is holding steady at 55%, matching last year’s levels. Gen Z (67%) and Millennials (64%) continue to lead the way in financial confidence.
Why it matters: Professionals in collections, lending, and financial services should take note of the generational and psychological divide. While younger consumers remain hopeful, and are even planning to increase spending, older generations are showing signs of retreat, reducing spending and reporting higher concern about inflation and recession risks.
Key insights:
- Inflation and recession top the worry list: 81% of consumers cited inflation among their top three concerns. Recession fears surged to 52%, the highest in two years.
- Tariff anxiety fuels credit interest: 87% expressed concern about tariffs, and among those “very concerned,” 37% plan to apply for new or refinanced credit, which is notably higher than the 30% of less-concerned peers. Credit card limits, personal loans, and BNPL services are the most sought-after tools.
- Side hustles fill income gaps: With 68% of consumers living paycheck to paycheck and many struggling to pay bills, over 40% now have side jobs. Among struggling consumers, nearly 75% have either started or increased side work due to economic pressures. That work now accounts for an average of 43% of side hustlers’ total income and 76% for those earning under $50K.
Zoom out: Other national data points add to the cloudy outlook:
- The WalletHub Economic Index fell 13.3% year-over-year, signaling broader concern about financial wellbeing.
- Home and car purchase intentions declined sharply (nearly -23% and -21% respectively), as did interest in making large purchases (-13%).
- Confidence in job stability, credit score improvement, and debt reduction all dropped compared to 2024.
Between the lines: Despite economic resilience on the macro level, financial anxiety and uncertainty are deeply embedded in consumer sentiment. With younger consumers still looking to borrow, spend, and grow and older ones pulling back organizations targeting delinquent or at-risk accounts may need to sharpen their segmentation strategies.
The bottom line:
