Why 26% of Americans Are Living Beyond Their Means

More than a quarter of Americans say they spend more than they make, one of a number of metrics in recent surveys that show U.S. household finances are under growing strain.

Spending Outpacing Income at a Higher Rate, More People Finding It Difficult to Pay Bills

In its triennial National Financial Capability Study released last month, the Financial Industry Regulatory Authority (FINRA) reported that 26% of Americans say they spend more than they earn, up from the prior range of 18% to 20%. The survey, conducted in the second half of 2024, included about 500 adults from each U.S. state and Washington, D.C., for a nationally representative sample of more than 25,500 participants.

U.S. consumers are showing signs of strain, giving back much of the financial progress they’ve made since 2009, according to the survey. For the first time in its six editions, the share of Americans who said they “find it not at all difficult” to pay all of their bills fell from a record of 54% in 2021 to 44% in the latest survey.

“The 2024 National Financial Capability Study reveals a concerning shift in Americans’ financial resilience,” FINRA Foundation President Gerri Walsh said in a statement. “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.”

The survey also found that people are less satisfied with their finances. 63% of people said thinking about their personal finances makes them anxious, up from 56% in 2021. Roughly 35% said they definitely or probably would not be able to come up with $2,000 for an unexpected expense, up from 30% in the previous survey.

Financial Concerns Impacting Mental Health, Sleep Habits of Americans

Many Americans don’t expect rising expenses to slow down. In Northwestern Mutual’s Planning & Progress study, about 52% of adults said inflation is increasing faster than their income. Nearly two-thirds called inflation the biggest threat to their finances this year, and 44% said it remains the largest obstacle to their financial security.

That feeling of inflation as a concern is also impacting Americans’ mental health, as 69% of the more than 4,600 Americans involved in Northwestern Mutual’s January survey said they have been depressed or anxious thinking about finances, and 63% said those worries have impacted their sleep.

“Houses, kids, groceries and gas: all of these higher prices are having an outsized impact on people’s budgets, and most Americans believe these challenges will grow in 2025,” Northwestern Mutual Chief Field Officer John Roberts said in a statement.