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.
With robust sample sizes, Morning Consult’s economic data can be analyzed by specific demographics, such as gender, generation, political party, income, race and more. Please contact [email protected] to learn more about our consumer spending coverage.
Key Takeaways
The share of U.S. adults who said they would cover a $400 emergency expense with cash or equivalents dropped by 2 percentage points from the previous quarter to 44%, ending the year at its lowest level since tracking began in Q1 2023. Although the share of respondents who said they wouldn’t be able to afford such an expense declined slightly from last quarter, a growing share of consumers would need to rely at least partly on debt to cover it. Despite a softer inflation rate and resilient jobs growth this year, real incomes and savings have recently been trending lower as the cost of living remains elevated and strong spending over the summer diminished some households’ stockpiles of cash. With higher interest rates driving up the cost of carrying credit balances, increasing reliance on debt to fund emergency spending could put extra pressure on household budgets.
Gen Z consumers’ ability to pay for emergency expenses with cash has dropped substantially since the beginning of this year. The share of Gen Z adults who said they would pay for an emergency expense with cash fell by 4 points since last quarter, marking a third consecutive decline this year. Since Q1, the share of this group reporting that they could cover an unexpected expense with cash dropped 11 points to 28%, compared with a 3 point decline over the same period among all adults. After spending freely throughout the first half of the year, Gen Z consumers have begun pulling back on purchases in late Q3 as the end of summer brought fewer excuses to splurge and the resumption of student loan payments that threatened to cut into monthly budgets. While this generation has generally relied less on credit than their peers, increased financial pressures could push Gen Zers to reprioritize how they distribute incomes among spending, savings and debt.
U.S. adults are not only increasingly pessimistic about hypothetical $400 emergency expenses, they’re also paying in cash for their actual emergency expenses at lower rates. The share of U.S. adults paying for an actual emergency expense between $200-$600 with cash or equivalents dropped 5 percentage points to 58%, its lowest level this year. Meanwhile, the share of adults using at least some debt to cover an unexpected expense saw a corresponding increase. Although U.S. adults are reporting more difficulty paying for emergency expenses with cash, actual expenses reported by respondents fell for nearly all categories, with medical bills and unexpected education or childcare costs registering particularly large drops of $65 and $53, respectively. Vehicle repair and medical care were the most commonly reported expense types and the most costly ones, with median values of $318 and $315, respectively.
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
Payment Type for an Actual Emergency Expense
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 Oct. 9-17, 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]
