The share of Americans who said they could cover a $400 emergency expense with cash or equivalent dropped for the third quarter in a row, according to a survey out Thursday.
Young adults in particular are showing higher financial stress as they face the return of student loan payments and higher prices. The share of Gen Z adults who say they’d have the cash to cover an unexpected expense dropped to 28%, down 11 percentage points from the first quarter of this year, according to a poll conducted by decision intelligence company Morning Consult for Bloomberg News.
“Gen Z consumers have really been supporting a lot of the surge in spending that we’ve seen over the summer,” especially on discretionary categories like vacations and apparel, said Morning Consult economist Sophia Baig in an interview. As student loans resume and cash runs out “they’re starting to sort of feel the heat a little bit more, especially with these emergency expenses,” she said.
Overall, US adults who said they could cover unexpected expenses with cash fell by 3 points over the same period, widening the financial gap between Gen Z adults and the rest of the older generations.
The US economy remained resilient last quarter thanks to robust consumer demand despite high prices and rapidly increasing borrowing costs. While the rate of inflation has slowed and the Federal Reserve held its benchmark rate steady at its meeting Wednesday, strong economic data has left the door open for further hikes.
The survey showed more Gen Z adults — who range in age from 18 to their mid-20s and have a tendency to rely less on credit than other generations — are using various forms of debt more often to pay for emergency expenses. Around 29% of them are putting them on their credit cards to pay it fully in the next statement while 27% are paying them off over time.
While some Gen Z adults said they would borrow money from relatives or sell some of their belongings, 19% of them reported not being able to pay for the expenses right away.
The most frequent emergency expenses shouldered by Gen Z respondents last quarter were related to education and childcare. Vehicle repairs placed second, followed by home repairs and medical bills.
The Morning Consult survey was conducted Oct. 10-16 among more than 11,000 respondents.
While industry statistics pointing to a succession crisis can cause alarm, advisor-owners should be free to consider a middle path between staying solo and catching the surging wave of M&A.
New joint research by T. Rowe Price, MIT, and Stanford University finds more diverse asset allocations among older participants.
With its asset pipeline bursting past $13 billion, Farther is looking to build more momentum with three new managing directors.
A Department of Labor proposal to scrap a regulatory provision under ERISA could create uncertainty for fiduciaries, the trade association argues.
"We continue to feel confident about our ability to capture 90%," LPL CEO Rich Steinmeier told analysts during the firm's 2nd quarter earnings call.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
