That is the central takeaway from “Generations Under Pressure: How Younger Consumers Are Coping With Higher Living Costs,” the latest PYMNTS Intelligence Generational Pulse Report. Based on a survey of 2,747 U.S. adult consumers, the report finds higher living costs are a growing burden: 51% of consumers say daily expenses are difficult to manage.

But the more telling split is generational. Younger consumers are using more tools to manage cash flow, while older consumers tend to rely on fewer levers. The result: households adapting in real time, even as confidence in those strategies weakens.

The coping story starts with a shared baseline. Between 60% and 75% of consumers in every age group have cut daily spending. That’s expected, given that grocery stress is nearly universal and housing, healthcare and savings pressures remain elevated.

The divergence is determined by age. Older consumers lean on restraint, cutting expenses, delaying big purchases and absorbing the pressure where they can. Baby boomers and seniors are also the most likely to report taking no action at all: 25% say they have no coping strategy.

Younger consumers are building something broader. Bridge millennials, millennials and Gen Z consumers are more likely to combine spending cuts with gig work, borrowing from family or friends, bill negotiation, buy now, pay later options and shifts in savings behavior — a layered financial patchwork that signals resourcefulness, but also a thinner margin for error.

Key Findings:

• 50% of consumers use two or three coping strategies to manage rising living costs, while 16% use four or more.
• 23% of bridge millennials, 22% of millennials and 21% of Gen Z consumers use four or more strategies, compared with 8% of baby boomers and seniors.
• The share of consumers who say their coping strategies are extremely or very effective fell to 25% in January from 34% in October.

That last point is the warning sign. Consumers are not standing still. Many are taking action, and younger adults in particular are showing flexibility.

They are cutting spending, seeking extra income and using payment tools to match expenses with available cash. But effort is no longer translating into control at the same rate.

For banks, payment providers and FinTechs, the opportunity is practical. Consumers may not need another reminder to budget harder.

They may need clearer visibility into bills, better timing around recurring expenses, safer short-term liquidity options and payment plans that are easy to understand. Healthcare, groceries and housing are not occasional expenses. They are monthly cash-flow tests.

The positive reading is that households are engaged. They are watching expenses, changing behavior and looking for ways to adapt.

The challenge for financial services firms is to meet that effort with tools that reduce complexity, not add to it. As higher costs linger, the next stage of consumer finance may be less about encouraging people to do more and more about helping them make the moves they are already making work better.

The index declined by 3.5 points in April, dropping to 49.8, amid the rising prices caused by the Iran war, according to the Surveys of Consumers’ final results for April.

“The Iran conflict appears to influence consumer views primarily through shocks to gasoline and potentially other prices,” Surveys of Consumers Director Joanne Hsu said in the report. “In contrast, military and diplomatic developments that do not lift supply constraints or lower energy prices are unlikely to buoy consumers.”

The connection between the price of gas and consumer sentiment was seen earlier in April, when a softening of gas prices caused by the announcement of a two-week ceasefire was followed by a modest improvement in consumer sentiment, according to the report.

April’s decline in consumer sentiment was seen across political affiliation, income, age and education, per the report.

The Surveys of Consumers also found that consumers’ expectations for business conditions on both short and long time horizons declined to levels that were about as low as those seen a year earlier when tariffs were implemented.

It also found that consumers’ year-ahead inflation expectations surged from 3.8% in March to 4.7%, the largest one-month increase since April 2025, and long-run inflation expectations climbed to 3.5%, the highest reading since October.

The Conference Board’s most recent Consumer Confidence Index, which was released March 31, about a month after the war began, found that consumer confidence had inched up in March despite surging costs from tariffs and war.

The impact of rising costs was not seen in the organization’s headline or component indexes but was evident in consumers’ 12-month inflation expectations, which rose to their highest levels since August, The Conference Board said in a March 31 press release.

“Consumers’ write-in responses on factors affecting the economy continued to skew towards pessimism,” The Conference Board Chief Economist Dana M Peterson said in the release. “Comments about prices and the cost of goods suggest that the cost of living remained at the top of consumers’ minds.”

The Conference Board is set to release its next Consumer Confidence Index on Tuesday (April 28).

The report shows that Labor Economy workers don’t stand outside the reach of workplace technology. In many cases, they are already dealing with it. More than one in three say their employer introduced new automation or AI in the last 12 months. Yet the report finds that support has not kept pace with that change. Among workers directly affected by new tools, most say they did not receive training, leaving many to face workplace change with limited guidance and little sense of control.

The findings also suggest that the impact of AI on lower-income workers extends beyond the workplace and into household financial stability. Labor Economy workers are less confident in their ability to find comparable-paying work if technology eliminates their current roles. They are less likely to say they have savings or emergency funds to fall back on if hours are reduced. They are also more likely to rely on government assistance when income falls short.

In that sense, the report is not just about workplace tools. It is about weakening financial resilience. As AI spreads across the economy, the workers with the smallest financial cushion may face the greatest pressure to adapt. For banks, payroll providers, FinTechs and employers, that creates a broader challenge around income stability, worker preparedness and financial support.

Download “The Resilience Deficit: Labor Workers in an Automated Economy” to learn more.

In “The Resilience Deficit: Labor Workers in an Automated Economy,” learn how:

• AI is reaching hourly workplaces faster than many assume. The report shows that automation has spread beyond office settings and technical roles to a meaningful share of Labor Economy workplaces, even when it has not yet fully changed day-to-day job duties.
• Confidence gaps reveal who feels most exposed to disruption. Labor Economy workers report lower confidence in job stability, weaker belief that their skills will stay valuable and less certainty that they can recover from technology-driven job loss. Those gaps help explain why AI can feel more threatening to this group.
• Financial fallback options shape how workers experience workplace change. When hours are cut or job roles shift, workers don’t all have the same options. The report shows clear differences in how Labor Economy and non-Labor Economy workers expect to manage lost income, from tapping savings to seeking extra shifts or outside assistance.

About the Wage to Wallet Index

The “Wage to Wallet Index” is a monthly study that tracks how wage growth, income access and job stability among 60 million essential U.S. workers impact household resilience, consumer demand and overall economic performance. This report is based on a survey of 32,464 U.S. adults. Analyses of data on automation, training, displacement and fallback are based on 2,369 respondents. The report compares the sentiments of Labor Economy workers, defined here as hourly workers earning no more than $25 an hour and typically less than $50,000 annually, with those of non-Labor Economy workers earning above those levels.

That is one of the more actionable findings in “The 2025 Global Digital Shopping Index: The Rise of the Mobile Window Shopper and What It Means for Payments,” a PYMNTS Intelligence study commissioned by Visa Acceptance Solutions. The report documents mobile shopping as a mainstream retail behavior worldwide: 48% of consumers used a phone for their most recent purchase, and 60% browse merchant sites multiple times a week.

The more specific force shaping the market is parents. They engage in 50% more digital shopping activity days than the average consumer and shoppers with children under their care used a phone in 58.6% of their most recent purchases, compared with 40.7% for non-parents. Notably, the pattern holds across markets: even in countries where digital adoption is less intense overall, parents remain highly engaged mobile shoppers.

That gives merchants a concrete playbook. The research shows these consumers gravitate toward clear payment choices, rewards, coupons, product details and easy-to-navigate stores. The implication is pointed: the next phase of digital growth may come less from new features than from eliminating the friction that slows someone down between school drop-off, work and dinner.

Convenience, the data suggests, is no longer an amenity. It is becoming the product itself.

Three numbers stand out:

• 59% of the days parents shop digitally, they make a purchase, showing that this group is not just browsing more often. They are converting at a higher rate.
• Shoppers with children under their care logged 63.5 digital shopping days per month, versus a 50.9 average across the full sample.
• 2% of shoppers used or wanted to use their preferred payment method at the merchant where they made their last purchase, making payment choice the top digital feature globally.

The broader message is upbeat for merchants willing to adapt. Mobile shopping is growing, but physical retail is still in the mix, with 73% of purchases across the eight countries still involving stores in some way.

That gives retailers room to improve both digital and in-store experiences at the same time. The opportunity is especially clear for businesses that make it easier to browse on a phone, save payment credentials securely and move from discovery to checkout without extra steps. For time-pressed shoppers, especially parents, that kind of simplicity is not a perk. It is a reason to come back.

The first family lives in a neighborhood where the zoned public school has mediocre ratings and a reputation that keeps most of their neighbors up at night. They send their two kids to a private school at roughly $7,800 per child. The mother works a second job on weekends to cover it. Ask her what she would cut if money got tight and she doesn’t even blink. Tuition is the last line she would touch. Private school, for her, is absolutely essential.

The second family earns the same income, lives in the same metro area, and has the same number of kids. Three years ago, they moved specifically because the suburb they targeted has one of the top-rated public-school districts in the state. Their kids walk to a public school that sends graduates to top universities every year. Ask this mother whether private school is essential and the question doesn’t even register. Private school, for her, is irrelevant.

Same line item. Same income. Same city. One household treats it as non-negotiable. The other doesn’t even think about it.

The Tomato-Tomahto of the Household Budget

This is the heart of what new PYMNTS Intelligence data shows.

What makes something feel non-negotiable is almost never about what it costs in absolute dollars. Essential isn’t a characteristic of the expense. It’s the characteristic of the person spending the money on it.

A PYMNTS Intelligence survey of more than 3,400 consumers put the same 22 line items in front of everyone and asked them to classify each one as absolutely essential, necessary but a choice or purely discretionary. The results don’t line up by income. They line up by life stage, family structure and the commitments each household has locked in over the years.

Take private school. It’s rated absolutely essential by 17%, necessary but a choice by 23%, and purely discretionary by 60%. Family financial support splits 26/34/40.

Then there’s grocery delivery. Half of consumers earning less than $50,000 say it’s essential or necessary, versus 42% of those earning $150,000 or more. For a household earning $45,000, getting groceries delivered might be a logistics requirement rather than a premium convenience if the consumer doesn’t own a car or works irregular hours or multiple jobs and can’t easily get to a store.

Compare all of that to insurance, rated essential by 65% of consumers with only 11% calling it discretionary.

Nobody really disagrees about insurance. The items where consumers are closer together than apart are universal, structural necessities. The items where consumers split are the ones where essential means whatever the specific household at the specific life stage decides it means.

Read More: The Three Blind Spots in How Consumer Sentiment Is Measured

 A Better Way to Think About Essential

Source: PYMNTS Intelligence framework, New Reality Check: The Paycheck-to-Paycheck Report, January 2026.

The traditional way finance professionals sort spending is into fixed, variable and discretionary buckets. The flaw with that classification is that it isn’t always correlated with how consumers manage their money.

A better frame has two dimensions:

• Why the expense feels essential
• How locked in it is

Structurally-Locked expenses are forced by circumstances that feel immovable. Childcare for a working parent. A mortgage. A car in a sprawling metro area. Student debt from a decision made a decade ago. PYMNTS Intelligence data finds that more than half (54%) of the full sample rates mortgage/housing absolutely essential, half rate car ownership essential, and 37% of married parents rate childcare essential.

Values-Locked expenses are conscious priorities that have hardened into a financial commitment. Private school tuition. A gym for pain management. Monthly support to an aging parent. The households rating these as essential aren’t wealthier than the ones that don’t. They’re different because of what they’ve decided matters, and is therefore essential.

Circumstantial Recurring expenses are related to needs shaped by a personal situation rather than universal necessity. They can be changed or eliminated, but not easily and not without other potential financial consequences. Accordingly, 65% of consumers rate insurance as essential and 58% of consumers rate healthcare as essential; these expenses dominate this quadrant and the overall rankings.

Lifestyle Choices are the only expenses that map cleanly to the conventional discretionary bucket. Subscriptions (14% of consumers say they’re essential), travel (13%), entertainment (10%) and expedited shipping (10%) are nice-to-haves but could be dialed back or eliminated, depending.

When expenses are put into this framework, the same items land in different buckets. A gym membership lives in Lifestyle Choices for one household and in Values-Locked for another. Childcare is Structurally-Locked for a 34-year-old working parent and irrelevant to a 68-year-old retiree. Essential becomes a subjective call, not an objective one.

How Life Stage Rewrites the Priority List

The clearest way to see the many sides of “essential” at work is to walk through the U.S. consumer base segment by segment. Each one tells a different story about what gets pulled into the non-negotiable tier and why.

Let’s start with millennials, the generation living through the years when earlier commitments show up as non-negotiable monthly line items. Nearly seven in ten, 69%, say they live paycheck to paycheck. Half point to long-term life decisions as the reason, a rate 19 points higher than boomers and the steepest of any generation.

Read More: 38% of Millennials Pay Out of Pocket for Healthcare

Their non-negotiable tier reads like a structural inventory. Insurance, healthcare, the car, the mortgage, outside family support. What sets millennials apart is the tier just below.

More than a third (37%) cite childcare as essential.  Grocery delivery at 31%, because when both parents work and a toddler is in the car seat in the back, the friction associated with a trip to the grocery store gets real. Student loans at 27%. Where they live at 23%. None of those come across as lifestyle preferences. They’re commitments made years ago that can’t easily be unwound. That explains why only 54% of millennials feel in control of their financial situation even as they stay stuck inside it.

Married parents are the most obvious case of how Structural Lock-in operates. Sixty-seven percent live paycheck to paycheck. Sixty percent say they could change their situation with effort. Their budget says otherwise.

Married parents cite long-term life decisions as the reason for their financial situation at 59%, the highest rate of any household segment in the survey. Their top essentials look like everyone else’s: insurance, healthcare, mortgage. The difference shows up in the next tier.

Childcare and clothing at 37%. Grocery delivery at 30%. Private school at 29%, nearly double the 17% full-sample rate. Where they live at 25%. Every one of those categories runs at least eight points above the full sample, and none of them are stated preferences. They’re what it takes to run a household with kids. A second car to cover two drop-off routes. A neighborhood chosen for its middle school. Groceries delivered because nobody has time to shop on the way home. That’s why the married-parent budget is the most locked-in profile in this study.

Single parents show what happens when the same financial scaffolding has to stand on one income. More than eight in ten (82%) live paycheck to paycheck, the highest rate of any segment profiled. Only three in ten report any flexibility to cut. Clothing jumps to 40% essential, eleven points above the full sample, because a single income is feeding and clothing kids who outgrow their shoes every four months. Grocery delivery hits 34%, twelve points above the full sample. Family financial support, 39%. Private school, 28%. Childcare, 30%.

The most telling insight isn’t any single line item. It’s the pattern across the three reasons people give for their financial situation. Day-to-day spending, long-term decisions and unexpected events all rank within five points of each other. For most households, one of those three clearly dominates. For single parents, all three hit at once. There is no single lever to pull when things get tight because the budget is pressured from every direction.

The paycheck-to-paycheck struggling household closes the segment story in a way that looks paradoxical at first. Nearly half (48%) report little or no perceived control over their finances. Forty-three percent say spending changes alone can’t fix it. What drives their budget isn’t a pattern of everyday choices but shocks they didn’t plan for. Sixty-one percent point to unexpected events as the reason for their financial circumstances, compared with 31% of non-paycheck-to-paycheck consumers.

But here’s the counterintuitive part. Their essential ratings are lower across the board than other segments. Insurance at 55%. Healthcare at 50%. Mortgage at 46%. Car at 44%. This isn’t because they care less. It’s because they’ve already cut everything that could be cut. What remains is non-negotiable, and there’s nothing more left to trim.

Read More: How 30 Million Workers Borrow from Tomorrow to Pay for Today

Generation layers on top of all this. The sharpest divide between age groups isn’t on insurance or housing, where consensus about essentials is broad. It’s on the small daily line items that older generations treat as obviously discretionary.

Gen Z and millennials are up to ten times more likely than boomers to classify coffee, lunch out, food delivery, subscriptions and gym memberships as essential. For a 24-year-old with a two-hour commute, a food delivery subscription is about logistics and convenience. For a 72-year-old retiree with a fully stocked pantry, it’s an obvious waste. Neither is wrong. They’re describing different lives with different priorities.

Read More: Healthcare on Hold: Why 1 in 4 Gen Z Consumers Skip the Doctor

Parenthood is the single variable that reshapes the priority list more than any other. Married and single parents rate childcare, private school, family support, grocery delivery, food delivery, clothing and meal kits dramatically higher than adults without children. Childcare is obvious. The less obvious ones tell the real story. Meal kits, food delivery, grocery delivery. For parents, these aren’t indulgences. They’re how the household runs.

Read More: How Time Became the Next Great Asset Class

Grocery delivery sits at 22% essential in the full sample, 30% for married parents, 34% for single parents. Food delivery shows the same logic from a different angle. Thirty-four percent of households earning under $50,000 rate it essential or necessary, compared with 31% of households earning over $150,000. A worker juggling two hourly jobs treats the $12 delivery fee as the cost of eating the meal that has to happen between shifts. For a higher earner with a predictable schedule, the same line item is convenience.

The clearest signal in the entire dataset is clothing for single parents. Forty percent call it essential and another 46% call it necessary, putting 86% at or above necessary. Only 14% call clothing purely discretionary. For most consumers, clothing is lifestyle. For a single parent with growing children, it is regarded more like the utility bill.

Financial lifestyle adds a final twist to the picture. Nearly a quarter of paycheck-to-paycheck consumers (23%) earn $100,000 or more. Not because they spend carelessly, but because of commitments already locked in. The mortgage on a house in a good school district. Childcare for two kids. Student loans still running a decade after graduation. A six-figure salary doesn’t unwind any of that.

Read More: Who Is the Paycheck-to-Paycheck Consumer in America?

Consumers who aren’t paycheck to paycheck actually rate structural items like insurance, healthcare and mortgage as more essential than consumers who are struggling. You would expect the opposite. The reason shows up in what each group blames. Two-thirds (66%) of non paycheck-to-paycheck consumers point to day-to-day spending as the main driver of their financial situation. They frame it that way when the structural bills feel handled. For these households, their control levers live in the daily choices, not the locked-in commitments.

Struggling consumers tell a different story. They’re twice as likely as non-paycheck to paycheck consumers to cite unexpected events as the cause of their financial situation (61% versus 31%). Forty percent report low or no flexibility to cut expenses, compared with 18% of non-paycheck-to-paycheck  consumers. That 22-point flexibility gap is the single widest in the dataset, and it is structural that becomes behavioral.

Read More: Meet the 27 Million Americans Who Drive 8% of Consumer Spend but Struggle to Pay Their Bills

Pulling It All Together

The picture that emerges across these segments is that essential is a characteristic of the person spending, not of the expense itself.

What actually predicts how a household will behave under financial pressure is the combination of life stage, family structure and financial history. Millennials cite long-term decisions at 50%. Married parents at 59%. Boomers at 31%. That 28-point spread between younger or parenting households and boomers is about which commitments are actively running through the budget. And how willing those households are to protect the priorities behind them.

Segmenting customers by income decile or FICO band captures none of that. Segmenting by priority profile captures all of it.

The Priority Behind the Payment

Every payments company, credit issuer and bank has built its data stack around two questions. What did the consumer buy, and how much did they spend? The PYMNTS Intelligence data in this report says those questions answer less than half of what matters.

What a consumer buys is visible in the transaction record. Why they bought it, whether it is a conscious priority or a forced one, and whether they would fight to protect it under financial pressure, isn’t.

The next competitive edge in payments and financial services isn’t more behavioral data. It’s priority data.

Consider two $7,800 annual tuition payments sitting in two different customer profiles. Same category, same frequency, same payment amount. In the transaction record, they’re indistinguishable. In reality, they’re three different customers. For the 17% of households that rate private school absolutely essential, that $7,800 is sacred. Those consumers will go into debt to protect it. For the 23% who call it necessary but a choice, it’s up for review the minute cash flow tightens. For the 60% who call it discretionary, and who happen to be paying the tuition because a grandmom is paying, it’s the first thing to go. Transaction data alone can’t tell them apart.

Read More: Why the Offers Economy Is Broken

Priority data gives a view of who the customer is, what they have committed to and what they will trade off to protect those commitments. It predicts the next move in a way the transaction record can’t. The implications play out differently for different parts of the ecosystem.

For credit issuers, priority data answers the single most valuable question in the business. If this consumer’s cash flow tightens, which bills get paid and which may not? Forty-three percent of paycheck-to-paycheck consumers who are struggling say spending changes alone cannot fix their situation. They’ll miss a payment on something.

Priority data tells the issuer which something.

Read More: Your Business Has Its Payments Data. Now What?

For merchants, the lesson is that product category isn’t destiny. The same subscription service splits 14% essential, 32% necessary, and 54% discretionary across the full sample, but 17% essential and 43% necessary among single parents. That’s one product and two completely different retention fights.

The Values-Locked customer will swallow a price increase. The Lifestyle Choice customer will cancel the moment a competitor runs a promotion. The same treatment for both leaks revenue at both ends. Dynamic pricing, loyalty programs and churn prevention all need to follow where the category sits in the customer’s priority stack, not the category code.

For Buy, Now Pay Later and installment lenders, priority data points to an opportunity much larger than discretionary retail. Thirty-seven percent of married parents call childcare absolutely essential. Twenty-nine percent call private school essential. Forty-one percent call family financial support essential. These are the recurring, high-ticket, Values-Locked line items that households currently put on credit cards, take from savings, or borrow from family to cover. Pay later products built for those priorities capture a segment the retail-focused BNPL players aren’t actively addressing. The underwriting case is stronger, too, because households don’t default on what they’ve decided matters most.

For banks and personal financial management tools, the implication is that sorting spending by category is a map drawn against how consumers actually think. A single parent’s clothing spend isn’t lifestyle. A millennial’s food delivery isn’t dining out when it functions as a logistics and convenience tool for a working household. A gym membership isn’t fitness when the user joined for chronic pain.

Money management tools that let consumers tag their own priorities, or that infer priorities from which categories survive the next income shock, stop being transactional logs and start being the household’s priority dashboard. That’s a stickier relationship, and one of the few defensible positions left as transaction-data parity among competitors continues to erode.

Read More: The Next Battle in Credit Won’t Be for Top of Wallet

Across all of those use cases, the strategic insight is the same. The successful payments, credit and banking players over the next decade won’t always be the ones with more transaction data. They’ll be the ones who know who their customer is underneath the transaction.

Two consumers with identical demographics and identical purchase histories can have radically different priorities, and those priorities decide how they behave under pressure.

The question everyone should be asking is whether their data strategy reflects that. Or whether it is still bucketing customers simply by what they bought last month.

 

Until NEXT time.

Join the 21,000 subscribers who’ve already said yes to what’s NEXT.

 

That is the central takeaway from the March 2026 PYMNTS Data Book, “The Millennial Money Squeeze: Data Shows Rising Cost Pressures,” based on findings from a recent edition of the Generational Pulse Report. The data indicate that millennials face more overlapping financial pressures than older consumers, use more tactics to stay on top of bills and see their confidence decline as those tactics deliver less relief. The picture may be one of stress, but it also shows a generation that is highly engaged with its finances, adjusting in real time as household costs shift.

Among the Findings:

• Millennials report 3.4 simultaneous cost pressures on average, compared with 2.6 for baby boomers and seniors. That gap suggests younger households are not dealing with one isolated budget issue. They are managing several at once, from everyday spending to family-related expenses.
• Grocery stress among millennials rose to 90% in January 2026 from 79% in October 2025, an 11 percentage point increase. That makes food and household essentials one of the clearest pressure points in the report and shows how even basic recurring purchases are forcing tougher day-to-day choices.
• Twenty-two percent of millennials use four or more coping strategies at the same time, yet the share who said those strategies were working well fell to 32% from 47%, a 15-point drop from October to January. In other words, many millennials are putting in more effort without feeling more secure.

What stands out beyond the top-line numbers is how broad the financial strain appears to be. This is not only a story about inflation fatigue or rising prices at the checkout line. The report shows that millennials and bridge millennials are also carrying some of the heaviest family-related costs, with 46% to 52% reporting pressure from childcare or daycare and 46% to 50% citing school-related expenses.

Those are costs that tend to arrive during the same life stage when careers are expanding, families are growing and financial responsibilities are multiplying.

There is still a constructive signal in the data. Millennials are not disengaging. They are budgeting, adapting and trying multiple ways to keep pace.

The trouble is that the old playbook is not stretching as far as it used to. For banks, FinTechs and payments companies, that creates an opening. Consumers in this age group do not just need more credit. They need tools that make everyday money management simpler, clearer and more effective. The report suggests that the real opportunity may lie in helping this generation turn effort back into confidence.

That’s the central takeaway from “Running on Empty: How Paycheck-to-Paycheck Living Turns Small Shocks Into Big Crises,” a PYMNTS Intelligence report based on a survey of 2,465 U.S. consumers.

The report finds that about 2 in 3 consumers were living paycheck to paycheck at the end of 2025, but the more important shift is underneath that headline number: a rising share are doing so out of necessity, not preference.

The findings indicate that expense shocks are becoming a defining feature of household finances, especially for people already stretched by higher costs for food, housing, utilities and insurance.

• 40% of consumers were living paycheck to paycheck out of financial necessity in December 2025, up from 29% a year earlier. That suggests more households are reaching the point where income is consumed by essentials rather than optional spending.
• Two-thirds of consumers who experienced a financial shock in the past year said their largest unexpected expense topped $1,000. More than half said they faced at least one large surprise expense, and paycheck-to-paycheck households were the most likely to face repeated emergencies.
• Only 48.5% of all consumers said they were very or extremely confident they could cover a $1,000 unexpected expense without falling behind on other bills. Among consumers living paycheck-to-paycheck and struggling to pay bills, that figure fell to 22.4%.

What stands out in the report is not simply that Americans are under pressure. It is that the pressure is becoming more repetitive and more structural. For many households, unexpected expenses keep recurring, making recovery harder each time. The report notes that paycheck-to-paycheck consumers are especially likely to encounter smaller-dollar emergencies under $1,000. That matters because these are exactly the kinds of costs that arrive often enough to destabilize a tight budget but not always large enough to attract formal support or planning.

The good news is that the data also points to where resilience can be built. Across the broader population, liquid savings and personal loans remain the main tools people use to absorb emergency expenses. Households with stronger cash buffers and access to lower-cost credit are much less likely to spiral when something goes wrong.

The divide is clear, but so is the opportunity. Better short-term savings tools, wider access to affordable credit and products designed around real-world cash flow could help turn expense shocks back into temporary setbacks instead of lasting financial damage. Even in a strained environment, that is a practical path forward.

At PYMNTS Intelligence, we work with businesses to uncover insights that fuel intelligent, data-driven discussions on changing customer expectations, a more connected economy and the strategic shifts necessary to achieve outcomes. With rigorous research methodologies and unwavering commitment to objective quality, we offer trusted data to grow your business. As our partner, you’ll have access to our diverse team of PhDs, researchers, data analysts, number crunchers, subject matter veterans and editorial experts.

In “The New Checkout: Crimped Consumers Lean Into Online Retail and Digital Wallets,” PYMNTS Intelligence finds that financial pressure is reshaping shopping behavior in ways that go beyond broad spending trends. The most revealing signal is at the retailer level.

Consumers under financial stress are becoming more deliberate. They are leaning toward merchants that signal value, moving more grocery activity online and turning to digital wallets as a practical budgeting tool rather than a novelty.

Walmart stands out as one of the clearest winners among consumers facing the most strain. Among online grocery shoppers under high financial stress, 56% made their most recent purchase at Walmart, versus 50% of low-stress shoppers.

In stores, the gap is even more striking: 37% of high-stress grocery shoppers last bought at Walmart, compared with 26% of low-stress shoppers. Dollar Tree also gains ground among stressed in-store retail shoppers, reinforcing the idea that shoppers are actively seeking merchants tied to lower prices and tighter control over spending.

Spending More Per Trip

At the same time, the report suggests that pressure does not always mean smaller baskets. In fact, stressed consumers often spend more per trip. Their last grocery purchase averaged $109, compared with $95 for low-stress shoppers. Their last retail purchase averaged $111, versus $88. In online retail, the gap widened sharply, with high-stress shoppers spending an average of $169, compared with $96 for low-stress consumers.

The data point to a more planned style of shopping, where households may be consolidating purchases, stocking up when they find the right prices, or using digital channels to avoid repeated trips and extra delivery costs.

• 56% of high-stress online grocery shoppers made their most recent purchase at Walmart, compared with 50% of low-stress shoppers. In stores, Walmart’s share was 37% among high-stress grocery shoppers versus 26% among low-stress consumers.
• High-stress consumers spent $109 on their last grocery purchase and $111 on their last retail purchase, compared with $95 and $88 for low-stress shoppers. In online retail alone, the figures were $169 versus $96.
• High-stress online retail shoppers were 34% less likely to buy from Amazon than low-stress shoppers, yet they were nearly three times as likely to buy from Target. That suggests value messaging is landing differently across retailers.

The encouraging takeaway is that consumers are not standing still. They are adapting to ever-changing economic realities. The report shows more online grocery buying among financially stressed households, stronger use of digital wallets and a growing tendency to match shopping trips with merchants and payment methods that offer more visibility and flexibility.

High-stress consumers were more than twice as likely as low-stress consumers to use digital wallets for their last grocery and retail purchases, and wallet use keeps rising, especially among younger shoppers.

For retailers and payments players, that creates a clear opening. Consumers are showing exactly what they value: sharper pricing, easier planning and payment experiences that help them stay in control.

 

Between 2019 and 2025, the median monthly cost of condo fees rose 29% to $420, while HOA fees rose 26% to $63, the report said, citing data from Realtor.com.

Beyond that, associations can issue special assessments to pay for large repairs and other expenses, according to the report.

One-fourth of owner households in the United States paid HOA or condo fees in 2024, the report said, citing data published in September by the Census Bureau.

These fees are likely to continue going up because the costs of property insurance, labor and materials are rising, per the report.

The PYMNTS Intelligence report “The Adjustable-Rate Reckoning: How Homeownership is Pushing Millions Paycheck to Paycheck” found that more than two-thirds of U.S. consumers live paycheck to paycheck, with their income being spent on basic bills and other expenses as soon as they receive it, and that 14% of those consumers cite the financial strain of buying a home as a key reason for their financial condition.

“The upshot is that homeownership is a major factor behind sending consumers into a paycheck-to-paycheck financial lifestyle,” the report said. “It ranks only behind taking time off work, buying a car and starting a business or freelancing as a primary source of income.”

In the analysis cited in WSJ, the Census Bureau said the national median monthly fee for condo and homeowner associations, collectively, was $135 in 2024. It added that a large share of homeowners in some states paid more than $500.

“The amount of condo and HOA fees differed widely between and within states,” the Census Bureau said. “In 2024, about 5.6 million or 26% of homes paid less than $50 a month and about 3 million homes paid more than $500 a month.”

Realtor.com said in a January press release that metro areas in Florida dominate the list of metros with the most expensive HOAs. The company attributed this to climate-related insurance costs and legislative changes that followed the 2021 Surfside condo collapse.

The report, “Income Divides: A Deep Dive on Household Income Differences in U.S. Consumer Expectations,” argues that household earnings now shape financial outlook more than almost any other factor in the newly-introduced PYMNTS Consumer Expectations Index. The index tracks personal financial resilience, buying climate and labor market security on a 0-to-100 scale, with 50 as neutral.

In February, households earning more than $150,000 posted an overall score of 63.1, while those earning less than $50,000 came in at 48. That 15-point gap has held for five straight months. The larger takeaway is not simply that higher earners feel better. It is that the U.S. consumer market is splitting into distinct financial realities, with each income band approaching spending, risk and financial planning from a very different place.

• 63.1 vs. 48: Consumers earning more than $150,000 scored 63.1 on the overall index in February, compared with 48 for households earning less than $50,000. That spread suggests confidence is no longer moving in a broad national wave. It is breaking along income lines, which matters for merchants, lenders and brands trying to read demand.
• 75 vs. 41: The sharpest gap in the report is emergency readiness. Households making $150,000 or more scored 75 on their ability to cover about $1,200 in unexpected expenses within a week. Those earning less than $50,000 scored 41. That points to a major difference in flexibility. Many lower-income consumers are still managing bills and debt, but they are doing so without much margin for emergencies.
• 80 vs. 86, but 40 vs. 54: Job security looks surprisingly stable across the income ladder, with lower-income consumers scoring 80 and top earners scoring 86 on confidence in keeping their current jobs. The larger separation appears in job mobility. Lower-income workers scored 40 on their ability to replace lost income quickly, while top earners scored 54. That means many people feel steady in the job they have, even if they do not feel especially free to move on from it.

That is where the report moves beyond the headline gap. It shows a consumer economy that still has pockets of resilience. Lower-income households posted a debt burden confidence score of 62, suggesting many consumers have become disciplined about managing what they owe, even in a strained environment. At the upper end, higher earners are not just more upbeat. Their optimism is backed by real financial capacity, including stronger savings and better emergency readiness.

For businesses, that creates an opening as much as a warning. The report suggests companies that tailor pricing, product design and messaging to these different income realities will have a better read on where demand is holding up and where consumers need more value, flexibility and reassurance. In that sense, the data is not only about financial stress. It is also a clearer map of how American households are adapting.

At PYMNTS Intelligence, we work with businesses to uncover insights that fuel intelligent, data-driven discussions on changing customer expectations, a more connected economy and the strategic shifts necessary to achieve outcomes. With rigorous research methodologies and unwavering commitment to objective quality, we offer trusted data to grow your business. As our partner, you’ll have access to our diverse team of PhDs, researchers, data analysts, number crunchers, subject matter veterans and editorial experts.