Survey: Half of Americans Don’t Have $250 to Spare

Exhausted businessman sitting at desk in office at night

The pandemic pushed Americans to take a closer look at their finances, and what some of them found is concerning. Half of Americans have less than $250 left over each month after accounting for their necessary expenses and regular spending, according to a new survey from The Balance. Twelve percent have nothing at all.

Key Takeaways

  • A third of people who keep a budget said they started doing so during the pandemic.
  • More than half of Americans said the pandemic made them more aware of how they spend their money, and 41% of Americans are being more careful with their money now.
  • Half of Americans have $250 or less in disposable income each month.

The Balance surveyed 1,000 adults in the U.S. who manage their own personal finances and have at least one financial account—such as checking, credit, or savings—in their name. People responded to the survey between Feb. 8-12, 2021, answering questions about how their personal finances have fared during the pandemic.

Many Thrashed While Others Thrive

Notably, respondents are split on how the pandemic has impacted their finances: 30% of Americans say the pandemic has made their financial situation worse, while 30% say it has made their financial situation better, signaling a K-shaped recovery that pulls different individuals or groups out of a recession at different rates, times, or magnitudes.

This dynamic is also reflected in the amount of money Americans are spending, with 29% of those surveyed saying they currently spend more than they did pre-pandemic, while 29% say they are spending less than they did before.

Overall, 56% of Americans say the pandemic has made them more aware of how much money they spend. The vast majority (86%) say they are keeping some form of budget for their income, with one third of them starting that budget during the pandemic. 

Meanwhile, 41% of Americans say the pandemic has spurred them to be more careful with their money.

Budgets Have Very Little Wiggle Room

Most Americans report having some disposable income left over every month, but not much: 50% say that amount is $250 or less.

On average, Americans spend 58% of their income on necessities, including rent and food, while reserving 20% for flexible spending on items like clothing and electronics. Among those that invest and save, 10% of their monthly income goes to savings, while 5% is dedicated to investing.

Despite keeping a budget, most Americans do overspend occasionally. Seventy percent of respondents say they overspend less than once a month, while 19% say they never spend more than they can or should.

When Americans do overspend, many tend to feel guilty afterward. The feeling of guilt is even more apparent in those whose financial situation has worsened during the pandemic (47%) compared to those whose situation has improved (29%). Meanwhile, Americans whose financial situation has improved during the pandemic are just as likely to feel happy (28%) when overspending than feel guilty, the survey found.

“It's important to sit with those feelings of guilt,” said Amy Morin, editor-in-chief of Verywell Mind and a licensed clinical social worker. “Trying to escape them might lead to more unhealthy behaviors.”

Saving and Investing Has Gone Up

Nearly one third (32%) of Americans are saving more than they did before the pandemic, while one fifth are investing more. Americans who said they’re faring better during the pandemic are also twice as likely to now be investing more (44%). 

The most popular thing Americans are saving for? An emergency fund. Among those who are saving, 44% of respondents are doing so for a rainy day. Those whose situation has worsened over the course of the year are more likely to be saving for emergencies (51%) versus those whose financial situation improved (38%).

The most common goals for Americans who are saving include: 

  • Emergencies (44%)
  • Retirement (33%)
  • Travel (31%)
  • Paying off debt (30%)

Debt Is Going Up, Too

Nearly one in three (29%) survey respondents have taken on new credit card debt since the pandemic started. Meanwhile, 12% have taken on new medical debt and 11% have taken on a new mortgage.  

Those doing better during the pandemic were more likely to have taken on a new mortgage (18%) versus those whose situation worsened (7%), indicating that the K-shaped recovery is apparent in the booming housing market.

Credit Cards Gained Favor 

Among the 73% who have credit cards, 40% say they have been using their credit cards more often during the pandemic compared to other forms of payment. Top reasons for the increased credit card usage include making most purchases online (48%), seeking rewards points (42%), and avoiding handling cash (42%).

Meanwhile, 68% of respondents with rewards cards have been redeeming their points during the pandemic. The most common use (43%) is cash rewards, though one quarter are converting to gift cards and 16% are receiving clothing/accessories. 

Those who are not spending their rewards points are most likely to be saving them for after the pandemic, with 16% reporting post-pandemic spending as the reason why they are holding on to their points. Other reasons included waiting until they can travel again (10%) and not being able to redeem the points on anything they want (5%).

Methodology

This survey was fielded from Feb. 8-12, 2021. Respondents (U.S., 18+) are representative of the U.S. population across age, gender, race/ethnicity, and region, manage their own personal finances, and have at least one account in their name (checking, credit, savings, retirement, brokerage, and/or cryptocurrency).

  • AGE: Gen Z 11% | Millennials 16% | Gen X 25% | Boomer 28% | Silent 8%
  • GENDER: Man 49% | Woman 51% | 0% Nonbinary/Self-describe
  • REGION: Midwest 21% | Northeast 17% | South 38% | West 23%
  • RACE/ETHNICITY: White 60% | Black 12% | Asian 8% | Latino 18% | Mixed Race/Self-describe 5%
  • HHI: <$25k 23% | $25k-$50k 27% | $50k-$75k 16% | $75k-$100k 13% | >$100k-$200k 17% 
  • LOCATION: Urban 32% | Suburban 45% | Rural 22%

Research by Amanda Morelli