Seventy-six percent of US consumers are reportedly cutting back on spending, up from 67% in 2024, according to findings from the Wells Fargo Money Study.
For adults in the first half of their financial lives, these numbers are even higher, with “82% of Gen Z adults and 79% of Millennials cutting back.”
And while not as high, it’s also of note that the youngest populations in the study are adapting to the current economic conditions “with 60% of teens also reporting that they’re reducing their spending.”
In keeping with this theme, “60% of Americans say they are making tough financial choices to navigate their lives.”
Nearly as many (55%) said that those tough choices “may involve delaying some life plans.”
Among those delaying life plans, “a majority cite delayed travel more than anything else (74%), followed by home renovations (39%), relocation (30%), and buying a home (30%).”
One in six (17%) have delayed education plans, “one in seven (14%) have delayed getting married, and one in eight (13%) have delayed retiring.”
Nearly all those surveyed (90%) responded they feel “sticker shock” in one or more areas of common spending, “including eating out, attending a concert, buying a bottle of water, or downloading a video game, and say actual costs are between 55% and 200% higher than what they expect.”
Liersch said:
“I would encourage people to continue to evaluate their financial choices and align their spending with what matters most to them. Life happens and making incremental progress toward a goal and adjusting timelines along the way – including setbacks – are all a part of the process. Staying focused on what we want to accomplish can get us through the twists and turns of our financial journey.”
Nearly all Americans (94%) acknowledge that they “want to do just that: align money choices with their values. And almost as many (86%) want to be more intentional and thoughtful about their spending.”
According to Liersch:
“These insights highlight that Americans are not just winging it. They are being extraordinarily introspective and thoughtful as they navigate their financial priorities and work toward achieving their financial goals.”
Americans say they “don’t judge others’ financial circumstances, but they do judge themselves”
Americans overwhelmingly say they believe “the amount of money their friends or family members have doesn’t matter.”
Almost nine out of 10 (87%) say it makes “no difference to them how much money another person has, and nearly as many (82%) say their friends include people of different levels of wealth.”
Yet more than half (56%) keep secret “how much they have, with a third of them (32%) saying it’s because they are trying to avoid people judging them.”
Regardless of whether they keep money secrets or not, “more than half of respondents (53%) say people knowing how much money they have would create stress.”
A substantial number of those surveyed also “spend time thinking about how much money other people have – and wishing they could have more themselves.”
Almost half (47%) responded they often “feel envious of how much money other people have, and nearly as many (45%) often compare their financial situation to others.”
More than one in three (37%) admit to obsessing “about getting rich, a third (34%) admire social media millionaires, and about one in four (23%) admit to sometimes overspending just to keep up with people around them.”
Eighty-six percent of respondents say they “have a clear picture of what they want their money to do for them.”
And the vast majority are optimistic about “how to do it: 87% say now is a good time to save and 65% say now is a good time to invest.”
Yet nearly two-thirds say they need “a mental reset (61%),” and the following factors are holding them back:
- Habits are not easy to change (48%)
- They focus on today rather than tomorrow (43%)
- They do not know enough about money and finance (32%)
- They have a lot of others relying on them financially (29%)
- They feel social and peer pressure (15%)
To overcome these challenges in making progress to their goals, Americans are seeking “more financial advice year over year.”
Last year, 24% said they were seeking “more advice from others; this year it’s 36%.”
Looking across generations, the desire for “more advice is higher with teens (54%), Gen Z adults (61%) and Millennials (46%).”
About the Study
On behalf of Wells Fargo, Versta Research conducted “a national survey of 3,657 U.S. adults and 203 U.S. teens age 14 to 17.”
Sampling was stratified, and data were “weighted by age, gender, race, ethnicity, income, and education to achieve accurate representation of the current population” based on estimates from the U.S. Census Bureau.
The survey was conducted “from September 5 to October 4, 2024.”
Assuming no sample bias, the maximum “margin of error for full-sample estimates is ±2%.”
Unless noted otherwise, findings are based “on the sample of adults, with data from teens reported separately.”