Fears of a recession loom as Americans struggle to afford food for their families

  • Nearly 40% of Americans are struggling to afford enough food for themselves and/or their households (39%), 17% are unable to pay their bills on time 
  • 41% of Americans don’t have an emergency fund, more than one in five have no savings at all (22%)
  • 46% of workers above the age of 55 are postponing retirement due to inflation 

Right now, 55% of Americans are living paycheck to paycheck. This, combined with sustained record inflation, is making it difficult for Americans to pay for basic necessities, like groceries and other bills, like utilities. According to a study conducted by Qualtrics on behalf of Credit Karma, nearly 40% of Americans say they’re struggling to afford enough food for themselves and/or their households (39%). This was especially true for lower income households, more than half of which said they’re struggling to afford food (52%). Additionally, nearly one-in-five Americans say they’re unable to pay their bills on time (17%) with more than a quarter of low income households reportedly being unable to do so. 

Higher earners were not exempt from these trends. According to the study, 40% of respondents with household income (HHI) above $100k say they’re currently living paycheck to paycheck and another 29% say they’re struggling to put food on the table. This is concerning as fears of a potential recession loom. 

What’s worse, inflation or a recession? 

More than two-thirds of Americans are fearful of a recession (65%), yet inflation continues to be the top economic concern for Americans right now. According to the study, nearly half of Americans consider inflation their biggest economic concern (48%), with those above the age of 55 being the most concerned. Respondents in this age group were also more likely than any other generation to be concerned about a potential recession (17%), compared to 9% of those aged between 18 and 34. This could indicate even older Americans who have had more time to build wealth aren’t immune to the current market conditions. 

You mentioned a recession?

When it comes to a recession, Americans are worried about not having enough money to pay for necessities, like food and clothing (40%), while others are worried about going into debt (34%) or having their retirement fund take a hit (29%). However, Americans’ recession concerns varied across age groups. For example, younger generations, those between the ages of 18 and 34 say they’re most concerned about losing their job (26%) and not having access to affordable housing (23%). Meanwhile, respondents over the age of 55 are concerned about their retirement fund taking a hit (40%) and not having enough money to afford necessities (40%). 

Are Americans prepared to weather a financial storm? 

If Americans’ savings are any indication, the answer looks grim. According to the study, 41% of Americans don’t have an emergency fund, that is money put aside for unexpected expenses like a car repair, medical bill or job loss. At the same time, more than one-in-five Americans don’t have any savings at all. What’s worse, those who are the most financially vulnerable are the most at risk. More than 60% of those with HHI below $50k don’t have an emergency savings fund and 41% have no savings at all. Conversely, one-third of Americans who earn over $100k have an estimated $30k or more in savings right now, further illustrating the “Tale of Two Cities” observed throughout the pandemic.

What are Americans doing to recession-proof their finances? 

For starters, many Americans are decreasing their spending. According to the study 57% of Americans have reduced their spending, with another 18% saying their spending has gone down significantly in the last six months. Additionally, Americans are focused on saving money (42%), creating a budget (30%) and paying down debt (27%). The latter will be increasingly important as interest rates continue to rise and debt levels continue to inch back up. In the last six months, 28% of Americans say their debt level went up with the majority of debt holders carrying credit card balances (59%). Of those, 22% say they are not confident they’ll be able to pay off their debt.  

Do you even invest, bro? 

Another area consumers may look to recession-proof their finances is within their stock portfolio. Of the 62% of respondents with investment in the stock market, 21% say they’ve decreased their investments in the last six months. As you might expect, younger generations were more likely to increase their investments during that time (24%), compared to 15% of those aged between 35-54 and 5% of those about the age of 55. Higher earners were also more likely to report increasing their investments, 21% compared to 12% of those earning between $50k and $100k and 9% of those earning less than $50k. 

Older generations, those who may soon look to retire, were also more likely to report not having any money invested in the stock market (46%), compared to 37% of those aged between 35 and 54 and 29% of those between 18 and 34. This, combined with inflation, could explain why many Americans above the age of 55 are delaying retirement. According to the study, 46% of workers above the age of 55 are postponing retirement due to inflation. 

“What’s most telling about this study is that nobody is safe from the current market conditions. People across all age groups and income brackets are experiencing the financial impacts of inflation and the rising cost of living, with many fearful of how they’ll weather a potential recession,” said Colleen McCreary, consumer financial advocate at Credit Karma. “Younger generations are worried about being able to secure jobs and earn enough money to get by while those who are nearing retirement age are worried about their retirement funds taking a hit and, in some cases, are prolonging retirement altogether. For those who are concerned about their finances right now, it’s important to shore up spending where you can, start building an emergency fund and, if you can, pay down any debt you may have – starting with your highest interest debt first. Lastly, if you have investments in the stock market, do your best not to panic. Remember, it’s a long game strategy.”


This survey was conducted online within the United States by Qualtrics on behalf of Credit Karma from August 15-16, 2022 among 1,048 U.S. adults ages 18 and older.