More than a quarter of US adults are struggling financially. 72% of Americans reported “living comfortably” or “doing okay,” according to December 2023 data from the Federal Reserve.
The remaining 28% were either “just getting by” (19%) or “finding it difficult to get by” (9%). The 72% at least doing okay is the lowest share since at the onset of the COVID-19 pandemic in April 2020. Prior to 2020, the rate hadn’t dipped that low since 2016.
The Federal Reserve tracks whether people feel their financial situations are improving or worsening in the US. In 2023, 31% of respondents felt they were worse off than the year prior. This is down from 35% in 2022, but still 11 points higher than the 20% of respondents who felt they were better off than a year ago.
From 2015 to 2021, more Americans felt their financial situations were improving than worsening. The opposite has been true in 2022 and 2023.
What are Americans’ main financial challenges?
Over the past two years, more respondents cited inflation as the reason for their financial difficulties than any other cause. Inflation reached a 40-year high of 9.1% in June 2022 and has yet to return to the Fed’s target of 2%.
After inflation, Americans pointed to the costs of basic living expenses and housing as their top financial challenges.
Does education impact financial security?
Adults with higher levels of education were more likely to feel financially secure. In 2023, 87% of respondents with a bachelor’s degree or more reported doing at least okay, compared to 67% of people with some college or a technical or associate’s degree and 63% of people with only high school diplomas or GED.
The lowest rate of reported financial security was among people who did not finish high school or an equivalent: less than half reported doing okay financially.
Source: USA Facts