A new report from the FINRA Investor Education Foundation reveals a significant shift in the financial health of American households, with millions more struggling to make ends meet compared to just three years ago. The findings, drawn from the sixth edition of the National Financial Capability Study (NFCS), have important implications for professionals across the credit and collection industry.
After more than a decade of gradual improvement, the study shows a dramatic reversal. Only 38% of adults report finding it “not at all difficult” to cover monthly expenses, down from 43% in 2021. Even more concerning: the share of Americans spending more than their income has jumped to 26%, a record high since the survey began in 2009.
Across all income levels, financial stress is rising. The number of Americans who say they have three months’ worth of emergency savings has dropped from 53% to 46%. That equates to an estimated 26 million more people unable to weather a financial shock.
Credit card usage patterns also reveal mounting pressure. While 79% of Americans have a credit card, only 53% pay their balance in full monthly, a six-point drop from the previous report. Nearly half of cardholders now engage in at least one fee-generating behavior, such as paying only the minimum or incurring late fees, with 41% doing so regularly.
Interestingly, despite these challenges, Americans remain optimistic. Seven in ten respondents said they’re confident they can meet their financial goals. But the data tells a more sobering story: 57% have not tried to calculate how much they need to save for retirement, and just 39% say they’ve even attempted to plan for it.
Financial literacy remains a concern. The average adult answered just 3.3 out of 7 financial literacy questions correctly, and only 4% answered all correctly. At the same time, 64% of respondents rated their own financial knowledge highly.
