Middle-income Americans are trimming budgets, delaying purchases, and picking up second jobs as the cost of living continues to outpace their incomes, according to Primerica’s quarterly Financial Security Monitor, which surveys households earning between $30,000 and $130,000.
The topline number should catch the attention of anyone in the receivables business: 71% of respondents say their income is falling behind the cost of living, up from 65% in March and the highest reading in the survey’s recent history. Nearly three-quarters (74%) rate their ability to save for the future negatively, also a new high, and two-thirds (66%) do not believe they are saving enough to retire comfortably.
The financial cushions that keep consumers current on their obligations are thinning. Just 58% say they have an emergency fund that would cover a $1,000 expense, down from 62% in March. The share rating their personal finances as excellent or good fell to 43%, down five points in a single quarter. Roughly a third (32%) say their credit card debt increased in the past three months.
The tradeoffs households are making are getting bigger. More than two-thirds (67%) have delayed a major purchase or expense. Non-emergency medical and dental care tops the list at 53%, up 10 points since March and 21 points since December, a trend with obvious implications for healthcare receivables. Half have put off home repairs, and 42% expect to travel less this summer.
Consumers are not standing still, though. Nearly half (46%) have successfully cut back on everyday spending this year, 32% have stuck to a stricter monthly budget, and among those employed, 60% already have or are considering a second job. Seven in 10 remain confident in their ability to adapt financially.
One more finding worth noting for an industry increasingly deploying AI in consumer communications: 58% of respondents would choose a human financial advisor over AI tools, and 60% prefer speaking with a live person when making financial decisions.
