Fed Rate Hike Comes as More Than One in Four Americans Say They Don’t Feel in Control of Their Day-to-Day Finances, NerdWallet’s Financial Resilience Index Finds
Key findings:
- Day-to-day financial control slips. The share of Americans who feel in control of their day-to-day finances fell for a second consecutive month, from 77% in July to 73% in September.
- Recession fears ease. Recession expectations fell to 61%, a statistically significant decline since NerdWallet’s Financial Resilience Index first launched in May (66%).
- A generational confidence gap. Baby boomers are most confident (89%) they can pay all their bills on time this month, compared to 77% of Gen Xers, 74% of Millennials and 68% of Gen Zers.
-
The cash-cushion divide. Just 40% of households earning under
$50,000 have enough cash on hand to cover an unexpected$1,000 expense, compared with 78% of those earning$100 ,000+. - Parents lean more on credit. Parents of children under 18 are more likely than adults without children to rely on credit – including credit cards, buy now, pay later plans and loans – to cover at least some expenses this month (44% versus 31%).
Last month's Index found that recession expectations and cash cushions rose together, signaling that households may have been growing more protective of their cash against the backdrop of ongoing
That picture shifted in September, based on survey data collected just before the Federal Reserve’s widely anticipated decision to raise rates. Recession expectations fell to 61%, down significantly since the Index launched in May (66%). But this improved outlook did not ease much pressure at home: more than one in four (27%) are feeling financially out of control this month, suggesting Americans may be feeling better about the economy, but worse about their own wallets.
"This is a divergence we haven't seen before in the Index," said
Fewer Americans Feel in Control of Their Money – NerdWallet’s Financial Resilience Index,
|
Measure |
|
|
|
|
Financial Resilience Index Score |
61.5 |
62.1 |
63.1 |
|
Feel in control of their day-to-day finances |
73% |
75% |
77% |
|
Confident in their ability to pay all of their bills on time this month |
78% |
79% |
79% |
|
Will rely on credit to manage at least some expenses |
35% |
36% |
33% |
|
Have enough cash on hand to cover an unexpected |
63% |
67% |
65% |
|
Believe the |
61% |
64% |
60% |
Younger Generations Report Lowest Financial Resilience – NerdWallet’s Financial Resilience Index,
|
Generation |
FRI Score |
Feel in Control |
Confident Paying Bills |
Expect a Recession |
|
Baby Boomers |
72.1 |
82% |
89% |
54% |
|
Gen Xers |
60.7 |
73% |
77% |
65% |
|
Millennials |
57.3 |
67% |
74% |
62% |
|
Gen Zers |
52.3 |
66% |
68% |
65% |
What We're Watching
With the Federal Reserve’s rate hike now in effect,
Methodology
The Financial Resilience Index survey was conducted online by The Harris Poll on behalf of
All five questions across this survey are weighted equally to develop a composite score with a maximum value of 100.
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Kassara McElroy
press@nerdwallet.com
Source: NerdWallet Inc.