More U.S. households are struggling financially, analysis finds

A growing number of American households became financially strapped over the past year and had a harder time keeping their heads above water, a long-running analysis finds.

The share of households considered vulnerable — those that have trouble saving, paying bills, repaying debts, and planning for future needs — rose to 17% from 15% last year, according to findings from the Financial Health Network, a nonprofit focused on financial stability.

And more households are reporting high levels of financial stress — 16%, up from 13% last year.

The findings come as families continue to face rising costs for basics like groceries and gas and for bigger-ticket purchases like homes and cars as well as a pullback in federal assistance for healthcare and food purchases.

The increase this year reversed a small improvement measured in 2025 and matched the highest level recorded since the network began publishing its annual report, Financial Health Pulse, eight years ago, researchers said.

“Households are struggling,” said Taylor Nelms, the network’s vice president of research and insights. The 2026 report, which will be publicly available Tuesday, is based on a survey of more than 7,600 households conducted this spring. The survey uses a nationally representative sample drawn from the Understanding America Study, a probability-based panel administered by the University of Southern California, to estimate findings about all U.S. households. The survey has a margin of error of plus or minus 1.1%.

The share of households considered financially healthy held steady, at just under a third, the report said. That level has remained flat for five years. The network defines healthy households as those able to meet current financial needs, stay on track to meet future needs, and recover from unexpected expenses or a drop in income.

Households may shift over time among the study’s different tiers — vulnerable, coping, and healthy. Those considered to be coping are successfully managing at least some aspects of their finances.

About 7.8 million households that were seen as coping in the spring of 2025 found themselves vulnerable this year, the report found. At the same time, about 6 million ascended from vulnerable to coping. The result was that the vulnerable segment grew by about 1.8 million households.

Low-income households were hit hard, researchers found. The share of those families paying all their bills on time, for instance, fell to 49% from 54%.

A number of challenges, including high costs for food, housing, and utilities, and less generous student loan and healthcare policies, are buffeting Americans, the report found. Financial vulnerability among student loan borrowers, for instance, rose to 27% from 21%, as the government began charging interest on loans that had been in a multiyear pause during the COVID-19 pandemic.

The share of households reporting unmanageable debt rose to 31% — the highest level in eight years — from 29% last year, while the share saying they paid all their bills on time fell by 3 percentage points, to 68%.

Changes in government programs have also pressured family finances, including the end of subsidies that had lowered the cost of Affordable Care Act health plans and new restrictions on SNAP food benefits, the report noted.

Household emergency savings held roughly steady this year, the analysis found, possibly because of larger tax refunds around the time the survey was conducted. (The bigger refunds followed a basket of tax breaks enacted as part of the budget law.)

But with less than half of households reporting that they are spending less than their income, it is unclear how long that cushion can last, Nelms said.

Mingli Zhong, a senior research associate in the family and financial well-being division at the think tank Urban Institute, said it was not easy to save when costs were high, but even $50 a month could add up over time. Saving the equivalent of one month of income is often an adequate buffer for many families, she said. “Emergency savings is about preventing people from falling into poverty in the first place.”

More employers are offering options to help workers build emergency savings, either as part of traditional retirement offerings or through separate programs managed by outside providers like Sunny Day Fund.

Sid Pailla, CEO of Sunny Day Fund, said the program encouraged saving for unexpected bills but also for longer-term goals like starting a family, buying a car, or taking a vacation. “Otherwise,” he said, “it comes off as a chore.”

The program’s suggested target of $2,000 may be a “stretch goal,” Pailla said, yet it is “one they feel they can get to.” Employers typically offer incentives, like a $25 or $50 sign-up bonus. Funds are deducted from workers’ paychecks and held at a federally insured bank currently paying just over 3% interest, he said. Withdrawals average $376.

Abner Rivera, 61, a production manager in Lakeland, Fla., for TRG Packaging & Display Solutions, said he had no emergency savings account, whether because money was tight or from “procrastination,” until his employer partnered with Sunny Day. He began saving $25 a week a year ago. “Before I knew it, I had $500,” he said, adding that he was able to use the funds for a $400 car repair. That encouraged him to increase his savings to $70 a week, and he is now nearing his $2,000 goal. Next, he aims to save even more, for a trip to Spain. He said he liked that Sunny Day sends him a weekly email updating his progress. “There’s a structure to it,” he said, which makes it easier to save.

Some employers offer grants for workers facing a crisis, often through third-party coordinators. Rachel Schneider, CEO of Canary, a company that manages workplace hardship grants for employers, said workers could request relief for a variety of setbacks, like a natural disaster, an eviction notice or a utility shut-off order, a sudden medical event, or a car accident leaving the employee without transportation. “People don’t have to put money in,” she said, “and they don’t have to pay it back.”

Companies set the rules for their programs, which Canary administers. Employers can fund grants themselves or raise donations from their workforce. Canary reviews applications submitted via an online portal so workers do not have to be embarrassed by approaching their manager.

“If you just got an eviction notice,” she said, “you don’t want to tell your boss that.”

Ari Medoff, CEO of home care services provider Arosa and a Canary board member and investor, said his company’s employees could request a total of $1,500 in grants over three years. Most of the money comes from Arosa’s workers who contribute a few dollars from each paycheck or at fundraising events. “I think, at its core, a healthy fund gets workers to participate,” he said. “It says, ‘Your peers are here for you.’”

This article originally appeared in the New York Times.