Despite steady income levels, American households are increasingly struggling to make ends meet. The 2024 National Financial Capability Study from the FINRA Foundation shows a reversal of over a decade’s worth of post-crisis progress.
Rising costs, particularly for food and other essentials, have eroded financial stability across income levels. Middle-income groups, once assumed to be relatively secure, now report levels of financial fragility similar to those with lower incomes.
Fewer households say they can cover basic expenses or build emergency savings, with just 46% able to withstand a three-month financial shock, down from 53% in 2021. This reversal comes amid growing reliance on credit, a decline in monthly credit card repayments, and increased use of alternative financial tools like Buy Now Pay Later.
“The 2024 National Financial Capability Study reveals a concerning shift in Americans’ financial resilience. After more than a decade of improvements, we’re seeing many households – particularly in middle-income brackets – struggling financially despite stable incomes. This ‘struggle of the middle’ signals that rising costs are creating financial strain across a broader segment of the population,” said Gerri Walsh, President of the FINRA Foundation.
At the same time, digital adoption and interest in AI-driven tools are reshaping financial behavior. A fifth of US adults express interest in receiving financial advice from artificial intelligence, signaling openness to new models of planning, even as overall financial literacy remains flat. Use of mobile banking, peer-to-peer transfers, and contactless payments continues to climb, yet foundational behaviors like saving for retirement show stark divides by education level.
While financial knowledge gaps are slowly closing across generations, the broader trend is clear: economic strain is not confined to the poor. The study paints a picture of a nation where rising inflation, mounting debt, and insufficient buffers have converged to make financial insecurity a mainstream experience.
Preliminary results
Preliminary state-by-state results from the 2024 National Financial Capability Study reveal that while 58% of US adults now correctly understand how inflation erodes savings, a notable five-point improvement from 2021, just 27% answered five or more financial knowledge questions correctly.
The top-performing states, led by Minnesota and Wisconsin, saw over a third of respondents reach that benchmark, while fewer than one in five did so in the lowest-ranked states.
Encouragingly, the youngest adults posted the greatest gains in inflation awareness, suggesting experience and recent headlines may be making economic concepts more tangible. But as the FINRA Foundation notes, the persistent state-by-state disparities underscore the need for stronger and more equittable financial education efforts nationwide.
Shrinking margin for error
After over a decade of steady improvement, Americans’ ability to cover everyday expenses has sharply deteriorated. The 2024 National Financial Capability Study shows that fewer adults report managing to pay bills without difficulty, with middle- and higher-income households showing the most marked declines.
The share of Americans spending more than they earn reached a record 26%, up from 19% in 2021, while those spending less fell to 38%. This erosion is not just confined to the lowest income bracket; households earning above $25,000 saw steeper drops in financial stability and savings behavior, hinting at a shrinking middle class buffer.
Healthcare expenses remain a pain point, especially among uninsured and younger Americans, nearly half of whom avoid medical visits due to cost, even though 89% of all respondents report having insurance.
Technology is reshaping financial behavior, but not necessarily improving financial outcomes. A vast majority of adults now rely on mobile devices to access banking services, transfer money, or make in-person purchases. Mobile banking has overtaken desktop use among younger adults, particularly those under 35, while trust in banking institutions remains highest among older and more affluent Americans.
Despite the rise in digital financial engagement, key indicators such as monthly credit card payment rates are slipping, and reliance on buy-now-pay-later tools is growing. These shifts suggest that technological access alone cannot compensate for deeper affordability issues and weak financial foundations.
Meanwhile, financial literacy remains stubbornly low, and large disparities remain. Men, older adults, and those with higher education levels perform better on average, though the gender gap in knowledge is narrowing among younger cohorts.
Crucially, higher financial literacy consistently correlates with healthier financial behaviors, from saving and budgeting to avoiding costly credit habits – evidence that closing knowledge gaps could be key to improving resilience in a time of rising costs and declining margins.
Financial fragility meets policy volatility
The FINRA Foundation’s findings on declining financial resilience among US adults, particularly the middle class, resonate far beyond personal budgeting concerns.
They reflect and compound the structural pressures playing out across the healthcare and trade sectors. As households report record-high rates of spending beyond their means and diminished ability to save for emergencies, these vulnerabilities intersect with policy decisions that directly affect cost-of-living and service access.
Regulatory missteps that increase healthcare expenses reinforce the very fragility the FINRA data captures, creating a feedback loop of financial and physical precarity. At the same time, the medtech industry’s response to rising tariffs – reshoring production, hiking prices, or delaying innovation – risks placing further upward pressure on consumer costs.
For a population already grappling with inflation, stagnant financial literacy, and shrinking financial buffers, even modest increases in the cost of goods and services – particularly in essential sectors such as health – can prove destabilizing.
The FINRA report shows that younger, lower-income, and middle-income Americans are most exposed to shocks, yet these are the same groups likely to bear the brunt of downstream effects from tariff-driven disruptions and healthcare market volatility.
In this way, household financial capability and macroeconomic policy are deeply intertwined: the erosion of one amplifies the consequences of the other. Together, they paint a picture of a US economy where both individual and systemic resilience are under strain.