Personal Finance

National Study by FINRA Foundation Finds More U.S. Households Struggling Financially Despite Stable Incomes
National Study by FINRA Foundation Finds More U.S. Households Struggling Financially Despite Stable Incomes

In a reversal of a 12-year period of sustained improvements in many of the key areas of financial capability, the sixth wave of the FINRA Investor Education Foundation’s National Financial Capability Study (NFCS) reveals an overall pattern of decline in the ability of U.S. adults to make ends meet and save for emergencies. While income remained steady, the impact of increased costs has put more households under financial strain than in years past.

The study, which has been conducted every three years since 2009, also highlighted financial strain among the middle groups in many of its demographic breakdowns, including those with annual household incomes between $25,000 and $75,000, those with some college education but no degree, and respondents between the ages of 35 and 54. Despite stable incomes, these groups, in particular, are under increasing financial pressures, and are engaging in expensive credit card practices.

The 2024 NFCS also found that while the rate of financial knowledge has held steady, fewer respondents say they’re satisfied with their overall financial condition. 

Key Findings

Report findings include the following: 

  • More households are feeling the financial strain of rising costs. More U.S. adults report that they’re spending more than they earn, and the amount who say they pay off their credit cards in full every month decreased by 6 percentage points since 2021. Increased food costs have resulted in over two-thirds of respondents cutting back on other areas of spending.
  • Many U.S. adults don’t have adequate savings. The percentage of U.S. adults who have enough money set aside to cover three months of living expenses dropped to 46 percent, down from 53 percent in 2021. When it comes to retirement savings, a large disparity exists: 80 percent of college graduates have a retirement account, compared to only 37 percent of those with no college degree. 
  • Most Americans manage financial products on their mobile devices. To access checking or savings accounts, 81 percent of those with bank accounts use their mobile devices. Sixty-five percent of adults use their devices to transfer money to other people, and 53 percent use them for in-person purchases. Additionally, one in five adults responded that they’d be interested in receiving financial advice from artificial intelligence.
  • Knowledge of how inflation reduces buying power increased. Compared to the 2021 survey, the number of respondents who understood that savings lose value when interest rates on savings lag inflation increased by 5 percentage points. For those ages 18 to 34, the number who answered the question correctly improved by 10 percentage points.

In addition to these findings, the National Financial Capability Study provides a rich, deep source of data—spanning over 15 years—that can be used by academics and others to conduct research and facilitate greater understanding of financial behavior and attitudes among U.S. adults. The FINRA Foundation supports innovative research and educational projects that empower Americans with the knowledge, skills and tools to make sound financial decisions.

Access the full 2024 report, datasets, survey instrument and methodology, and more.