The Federal Reserve’s annual look at household finances found that most American adults are getting by, but the share with a thin cushion has not recovered from its 2021 peak. This article walks through the headline results, the pressure points and what the figures can and cannot tell readers.
What the Fed surveyed, and when
The Federal Reserve Board released Economic Well-Being of U.S. Households in 2025 on May 13, 2026. It draws on the Survey of Household Economics and Decisionmaking, known as SHED, which was fielded October 17 to 28, 2025. The survey asks adults directly about income, bills, savings, borrowing and work, which makes it a useful complement to administrative data: it captures how people feel about their finances as well as what is on their statements.
Because the survey was taken in October 2025, it describes conditions about a year ago. Prices, interest rates and the labor market have moved since, so the results are best read as a well-documented baseline rather than a live reading.
Are most Americans doing okay financially?
According to the Fed, 73% of adults said they were doing okay financially or living comfortably in 2025. That matches 2024 but sits below the 78% recorded in 2021. The report adds that low-income, young and Black adults saw meaningful declines in this measure, so a stable national figure hides movement underneath.
Views of the broader economy were gloomier than views of personal finances. About one-fourth of adults rated the national economy as good or excellent, which the Fed says is 3 percentage points lower than in 2024 and 24 points lower than in 2019.
How many households could handle a $400 surprise?
The survey’s best-known question asks whether a person could cover a hypothetical $400 expense using cash or its equivalent. In 2025, 63% said yes. The Fed describes that as unchanged from the previous three years and down from 68% in 2021.
Illustrative arithmetic makes the other side visible: if 63 of every 100 adults can cover the $400, then 37 of every 100 cannot, or would need to borrow, sell something or go without. The figure is a rough thermometer of resilience rather than a measure of wealth, but it has moved little while headline wellbeing recovered.
The surprise is rarely hypothetical. The Fed reports that 59% of adults had at least one major unexpected expense in the prior 12 months. The most common were:
| Unexpected expense | Share of adults |
|---|---|
| Major vehicle repair or replacement | 30% |
| Major house or appliance repair | 22% |
| Major unexpected medical expense | 21% |
For readers building a buffer, the guide to building an emergency fund covers the mechanics of sizing and funding one.
Where bills are getting hard to pay
In the month before the survey, 16% of adults did not pay all of their bills in full, similar to 2024. Counting those who paid everything but found it difficult, 28% struggled with bills overall, according to the Fed’s chapter on economic hardships.
Among adults who struggled, the Fed lists how they coped:
- 48% cut back on other expenses
- 42% paid a bill late
- 23% used a credit card to pay over time
- 22% borrowed money from, or were given money by, friends or family
- 18% used savings or a retirement account
The savings buffer changes the pattern. Among struggling adults who could not cover a $500 expense from savings, 27% leaned on friends or family, versus 11% of those who could. Those who could cover it were more likely to draw on savings or a retirement account (32%, against 12%).
What is happening with credit cards and Buy Now, Pay Later?
The credit chapter reports that 45% of credit card owners carried a balance at least once in the prior 12 months, which is 12 percentage points lower than a decade earlier. Among all adults, 37% carried one.
Balances, however, are rising where households are most stretched. Using survey-linked credit bureau data, the Fed found the average card balance was $7,279 in 2025, up $748, or 11%, from $6,531 in 2023. The check: $748 divided by $6,531 is about 11.5%, consistent with the Fed’s rounding. The rise was uneven:
- Respondents who said they were finding it difficult to get by saw their average balance climb $2,530, or 37%, to $9,265.
- Those living comfortably saw an increase of only $59, or 1%, to $6,307.
For what a balance of that size costs, the explainer on what a 22% credit card APR costs walks through the daily interest math.
Buy Now, Pay Later, the short-term installment credit offered at many online checkouts, was used by 16% of adults, up 1 percentage point. Among users, 26% paid late at some point, and 11% had a BNPL payment trigger an overdraft or insufficient-funds fee in the prior year. These products can look interest-free, but the report shows that missed payments and bank fees can still produce costs.
Why do prices still weigh on household sentiment?
Just over nine in ten adults called price increases a minor or major concern in 2025, unchanged from 2024. The share calling it a major concern fell to 53% from 56%. Meanwhile, 58% said price changes had made their financial situation worse, down from 60% in 2024 and 65% in 2023.
That is an improvement in direction but not in level. Even with a lower share feeling worse off, a majority still does, which helps explain why broad satisfaction has not returned to the 2021 high. Price pressure also reaches employers: what small businesses are changing when every cost matters looks at how firms respond, with consequences for hiring and wages.
Housing, fraud and work: other pressure points
Several other findings round out the picture:
- Rent arrears: 23% of renters had been behind on rent at some point in the past year, up 2 points from 2024 and 6 points since 2021.
- Homeowners insurance: 6% of homeowners had no coverage, mostly because of cost. Among insured owners, 20% could not afford as much coverage as they wanted.
- Fraud: 20% of adults experienced financial fraud or scams, similar to 2024. Among adults earning under $50,000, the median loss was $400.
- Work: 42% called finding or keeping a job a minor or major concern, up from 37% in 2024. Layoffs rose slightly, and voluntary quits fell slightly.
- Retirement: 35% of non-retirees thought their retirement savings plan was on track, unchanged from 2024 and below 40% in 2021.
Long-run saving is what the retirement figure points to, and the comparison in index funds versus individual stocks covers one common way people approach it.
How to read a survey like this
A few cautions help. Self-reported measures such as “doing okay” depend on expectations, which differ by age and income. A single survey wave cannot show cause and effect, so the report describes patterns rather than explanations. And averages, like the $7,279 card balance, blend very different households, which is why the split between comfortable and struggling respondents is more revealing than the overall figure.
The consistent theme across chapters is a gap between aggregate stability and household-level fragility. A stable 73% and a low-but-steady 63% can coexist with rising balances, more rent arrears and greater job worry among those with the least room for error.
Conclusion: steady on average, stretched at the edges
The Fed’s 2025 survey describes households that have largely adjusted to higher prices but have not rebuilt the cushions they held in 2021. Emergency savings, card balances and rent arrears are the indicators to watch, because they show strain before it appears in headline sentiment. Next year’s results will show whether the softer labor market the Fed describes feeds through to those measures.
This article is general information and education, not personal financial advice. Survey results describe groups of adults and do not predict any one household’s circumstances.
Sources: Federal Reserve Board
