Quarterly Survey of Household Emergency Expenses and Decisionmaking
Source: Morning Consult Economic Intelligence
In collaboration with Bloomberg News, Morning Consult surveys approximately 11,000 U.S. adults each quarter on their households’ capacity to absorb emergency expenses and related economic decisions. The first section of the survey replicates questions from the Dealing With Unexpected Expenses section of the Federal Reserve’s annual Survey of Household Economics and Decisionmaking, which poses hypothetical questions on how consumers would respond to an emergency expense. The second section of Morning Consult’s survey focuses on actual outcomes reported by consumers who experienced emergency expenses, allowing for comparison between theoretical and observed behaviors.
Key Takeaways
Fewer than half of U.S. adults said they would pay for a $400 emergency expense with cash based on their current financial situation in the first and second quarters of 2023. In the second quarter, 48% of respondents indicated that they would cover an emergency expense exclusively with cash or cash equivalents. Meanwhile, 35% of respondents said they would need to use some type of debt to cover the expense, while 17% said they could not afford to pay at all. The fact that more than half of U.S. adults would need to use debt or would not be able to pay for a $400 emergency expense highlights how cash-strapped many Americans feel amid high prices and economic uncertainty.
Ability to pay for an emergency expense with cash varied largely by demographics: High-income, white and baby boomer respondents were more likely than their demographic counterparts to say they would cover the cost of an emergency expense without any debt. In the first quarter of 2023, high-income earners were more than twice as likely as low-income adults to say they would pay for a $400 emergency expense with cash or equivalents. This gap narrowed in the second quarter, driven in large part by a 5-percentage-point drop in the share of high-income adults who said they would pay for an emergency expense with cash.
Nearly half of low-income adults (48%) said they wouldn’t be able to pay some of their other bills if faced with an unexpected $400 expense. Substantially smaller shares of middle-income (20%) and high-income adults (8%) said they would be unable to cover some of their bills if hit by an emergency expense. Ability to pay other bills also varied by generation and race/ethnicity, with baby boomers and white adults most likely to be able to pay their bills in the face of an emergency expense.
When asked about the actual emergency expenses they faced, respondents’ reported medical and vehicle emergency expenses were most costly, with median values of $318 and $324, respectively. Many respondents reported more than one emergency expense, and the amount of reported unexpected expenses varied by income, with middle-income earners reporting higher levels of expenses for most categories. The median amount of total reported emergency expenses across all categories was $483, which highlights the importance of being able to afford a hypothetical $400 expense.
Ability to Cover an Emergency Expense With Cash
Source: Morning Consult Economic Intelligence
Inability to Pay Some Bills
Source: Morning Consult Economic Intelligence
Reported Emergency Expenses
Source: Morning Consult Economic Intelligence
Source of This Data
Methodology
The Morning Consult Quarterly Survey of Household Emergency Expenses and Decisionmaking relies on data collected through Morning Consult’s proprietary survey research capabilities. The interviews were conducted online from April 11-17, 2023, and the data is weighted to approximate a representative sample of U.S. adults based on gender, educational attainment, age, race and region. Results from the full survey have a quarterly sample size of approximately 11,000 U.S. adults and an unweighted margin of error of +/- 1 percentage point.
“Cash and cash equivalent” includes paying with cash, with money in a checking/savings account or putting the expense on a credit card and paying it in full at the next statement. “Noncash equivalent” includes putting the expense on a credit card and paying it off over time, using money from a bank loan or line of credit, borrowing from a friend or family member, selling something, or using a payday loan, deposit advance or overdraft.
About Morning Consult
Morning Consult is a global decision intelligence company changing how modern leaders make smarter, faster, better decisions. The company pairs its proprietary high-frequency data with applied artificial intelligence to better inform decisions on what people think and how they will act. Learn more at morningconsult.com.
Email [email protected] to speak with a member of the Morning Consult team.
Kayla Bruun is a senior economist at decision intelligence company Morning Consult, where she analyzes consumer spending, inflation and household finance trends, leveraging the company’s proprietary high-frequency data.
Prior to joining Morning Consult, Kayla was a key member of the corporate strategy team at telecommunications company SES, where she produced market intelligence and industry analysis of mobility markets.
Kayla also served as an economist at IHS Markit, where she covered global services industries, provided price forecasts, produced written analyses and served as a subject-matter expert on client-facing consulting projects.
Kayla earned a bachelor’s degree in economics from Emory University and an MBA with a certificate in nonmarket strategy from Georgetown University’s McDonough School of Business.
Follow her on Twitter @KaylaBruun. For speaking opportunities and booking requests, please email [email protected]
Sofia Baig is an economist at decision intelligence company Morning Consult, where she works on descriptive and predictive analysis that leverages Morning Consult’s proprietary high-frequency data. Previously, she worked for the Federal Reserve Board as a quantitative analyst, focusing on topics related to monetary policy and bank stress testing. She received a bachelor’s degree in economics from Pomona College and a master’s degree in mathematics and statistics from Georgetown University.
Follow her on Twitter @_SofiaBaig_For speaking opportunities and booking requests, please email [email protected]
