The State of Personal Finance in America 2022 – Ramsey Solutions

The Latest News on Student Loan Forgiveness
23 Min Read | Dec 20, 2022
Christmastime is almost here, but many Americans don’t have much to celebrate when it comes to their finances. The 40-year highs in inflation continue to make life more difficult—and may lead to a leaner Christmas for many shoppers. Negative financial factors like a lack of savings, reliance on debt to make ends meet, and the unknowns of student loan forgiveness are impacting Americans’ mental health as anxiety over money seems to be constantly front of mind.
The latest edition of The State of Personal Finance 2022 focuses on the upcoming Christmas shopping season to frame the larger story of Americans’ steadily growing anxiety about money based on trends that persist from previous quarters. The updated personal finance statistics also compare how today’s economic climate is affecting different generations’ mental health.
The most recent information in this study, which pertains to the third quarter of 2022, is featured first, followed by the previously released second and first quarter findings.
It’s beginning to look a lot like Christmas, which means lots of spending on gifts for friends and family. In fact, the average American plans on spending $809 on Christmas this year. But for many Americans, there might be fewer presents underneath the tree this year than in previous years.
Compared to last season, the latest personal finance data shows that only 14% of Americans plan to spend more this Christmas—with the majority (47%) saying they’ll spend less money.
47% of Americans Plan to Spend Less on Christmas

And Santa’s yearly visit to the good boys and girls is getting scaled back. Almost half (44%) of all families with children also plan to spend less on Christmas—though the average amount each family plans on spending is still around $1,300.
Christmas spending cutbacks are just one indicator of the current state of the economy. Inflation remains the biggest problem in America in terms of its effect on what people spend their money on regardless of the season. So it’s no surprise that people are struggling more now than they were at the beginning of 2022.
Americans struggling with their finances climbs to 37%
Over 100 million Americans (37%) are either struggling or in crisis with their finances. That’s up three percentage points from last quarter and 15 points from January. The good news is that a little over half (53%) said they are financially stable.
Savings, or the lack of it, is another indicator of increasing financial difficulty. Historically, Americans have not been great at saving money. But that trend reversed during the COVID-19 pandemic as people cut back on expenses and stashed their stimulus payments in their savings accounts. But with prices for necessities like food and gas continuing to go up due to inflation issues, more Americans are tapping into their savings to make up the difference.
In the last quarter, less than half of Americans (45%) said they had at least $1,000 in savings. And over a third (36%) have no savings at all.
As prices go up and savings accounts shrink, more Americans are resorting to debt to make ends meet. One in five Americans (18%) took on more consumer debt since June 2022. Only 11% decreased their consumer debt.
1 in 5 Americans fell deeper into debt since June 2022

Twenty-five percent (25%) of Americans—70 million people—said they are relying on credit cards more than normal to pay their bills. Only 16% said they were relying on credit cards less than normal.
Outstanding student loans have been a constant, growing financial problem in America. But in August, the Biden administration finally announced a student loan relief plan to forgive up to $20,000 in federal student loans per borrower (though the plan’s legality is still being debated).
While $20,000 is a lot of money, four out of five Americans with student loans will still have student loan debt even with the forgiveness. Only 20% said it would eliminate their student loan debt completely. Half said they will still have student loan debt, and 12% said the plan will not help them at all. Communication about the debt relief plan has been less than ideal. Fifty-seven percent (57%) of borrowers said the process to receive student loan forgiveness has been clear.
half of student loan borrowers are worried about payments restarting

Most student loan borrowers continue to worry about their payments restarting in January 2023. Student loan payments have been paused since March 2020 due to the COVID-19 pandemic. Now, 82% of borrowers are either somewhat worried (37%) or extremely worried (45%) about making their payments again. Those numbers have not changed since the first quarter of 2022, so the announcement of student loan forgiveness has not impacted the number of borrowers worried about making payments again next year.
All these financial struggles and worries point to a significant impact on not just Americans’ financial well-being but also their mental health. In the last quarter, half of Americans said their finances have had a negative impact on their mental health. Forty-one percent (41%) said they cried in the last three months because of stress brought on by money. And almost the same number (40%) have suffered an anxiety attack due to money issues.
Based on trends from the last two quarters, different age groups have different levels of stress and anxiety about money. Younger generations are more worried about their finances than older generations, with 71% of Gen Z dealing with high levels of money stress compared to 42% of baby boomers. The same holds true for who is losing sleep over their financial troubles.
Younger generations are more worried about their finances than older generations

This trend in personal finance data could be linked to two factors: generational wealth and generational experience. Boomers are in their retirement years (or fast approaching them), and many have spent a lifetime building wealth. Overall, they have a higher net worth than younger age groups. They’ve also seen their share of economic ups and downs, learning through experience that hard times in the economy are temporary.
Gen Z, however, is focused on launching their careers and have never experienced an economic downturn as a working adult. Most also did not have the opportunity to learn the basics of economics and personal finance in school, so they don’t have the necessary long-term perspective about money.
The daily struggle with money became more difficult for many Americans in the second quarter of 2022. One in three said they’re either struggling or in a crisis with their money. And the trend is moving steadily upward with a 12-point increase from the first quarter of 2021.
Over half (56%) of Americans said they had at least some difficulty paying their basic bills overall, while the number of people saying they struggled to pay for necessities like food and housing is on the rise. About 44% had trouble paying for food, up about 13 points from 18 months ago. Six in 10 renters said their housing costs were a strain (up 15 points) while nearly half (49%) of homeowners with mortgages found it hard to make their monthly payments, up six points from Q1 2021.
Younger Americans had the most trouble covering the basics when compared to their Baby Boomer parents and grandparents. Over 60% of Gen X, Millennials, and Gen Z (64%, 64%, and 67% respectively) faced difficulty paying their bills, compared to only 39% of Baby Boomers. About half of the younger generations (55% of Gen Z, 49% of Millennials, and 56% of Gen X) said they had trouble paying for food compared to only about a quarter of Baby Boomers (24%). Gen Z struggled the most with their mortgage payments (77%), and Gen X had the most difficulty paying rent (72%).
As with most things, debt made these issues even worse. People with debt had more trouble keeping their bills paid (66%) than those without debt (43%). The same was also true for paying a mortgage (53% vs 36%), rent (64% vs 57%), and for food (52% vs 32%).
americans trying to make ends meet
Americans’ two biggest challenges in paying for these basics were inflation (40%) and the cost of living (39%).
Consumers felt the effects of inflation the most with 85% saying it had at least some effect on their finances—up three points from last quarter. Inflation’s impact on Americans’ budgets has been trending up for the last three quarters.
inflation and cost of living named top money problems
As inflation continues to sap Americans’ spending power, most cut back on expenses to make ends meet, starting with travel. Seven in 10 said they cut back on their travel plans in the second quarter, continuing the trend from the first quarter. Other adjustments include not purchasing an item they had originally planned to purchase (41%) and reducing their monthly savings amount (33%) or debt payment (25%). Almost a quarter (22%) said they cut back on how much they’re putting away for retirement.
The money challenges of the last quarter encouraged many to keep better track of their money. Nearly three-quarters (73%) reported changes in their spending, saving, budgeting, or other money-related behaviors. Almost one-third (32%) said they started budgeting in some way.
Americans also found other ways to make their budgets work—some more helpful than others. 20% said they took on a second job or a side hustle to boost their income. 27% began selling items they had around the house. 25% said they used a credit card for a purchase they would normally pay for with cash. And 15% took on new debt to pay bills.
As the number of people struggling to pay for their basic needs grows, worry and anxiety about money are also on the rise. Nearly six in 10 Americans (59%) said they worry about their general finances daily—a 15-point increase from 18 months ago. Almost half (46%) have lost sleep in the last three months worrying about money, which is an 11-point increase from 18 months ago. And 59% believe they can’t get ahead with their finances—living paycheck to paycheck and not saving very much as a result.
half of americans losing sleep over money problems
The reality of many Americans’ financial situation and the resulting stress and anxiety are reflected in their feelings about the economy overall—especially when it comes to a possible recession. More than eight in 10 Americans (82%) are worried about the strength of the economy.
Not surprisingly, another eight in 10 Americans (84%) are also concerned about how a recession will impact their household, with 75% saying a recession would have a significant negative impact. A little over half (51%) said they’re financially prepared for a recession.
Here again, the burden of debt plays a big role in American’s outlook. People who were debt-free were less likely to say a recession would have a negative impact on them (66%) compared to those who had debt (82%).
8 in 10 americans worried about strength of economy
Americans’ uncertainty and stress around the country’s current economic situation carried over to their outlook on the real estate market. Most Americans were pessimistic about real estate—with only 24% saying they were optimistic about the market in their area. Half (51%) said the American dream of owning a home isn’t possible for most adults right now.
Digging deeper, 65% of Americans said it’s more difficult to own a home today compared to past decades. The significant and steady price increases in the housing market over the last two years are a main factor in people’s pessimistic perceptions, with 61% saying now was not a good time to buy a house and almost three-quarters (73%) believing housing prices will increase even more over the next year.
In a reversal of the overall generational patterns in this study, Baby Boomers were the most pessimistic generation about the real estate market. 77% said home ownership is difficult, which was significantly higher than the younger generations (59% of Gen Z, 54% of Millennials, and 66% of Gen X). 71% of Boomers didn’t think it was a good time to buy a house—compared to 55% of Gen Z, 50% of Millennials, and 65% of Gen X.
only 24% optimistic about real estate market
Despite (or perhaps, because of) concerns about the country’s economic situation, the Great Resignation is still a major force in the American job market. Well over half (57%) of Americans were considering leaving their current job, and just over a quarter (27%) took the plunge and changed their jobs in the past 12 months.
However, there’s another side to the career coin: The new jobs Americans are landing don’t always improve their personal financial situation. Of the people who changed jobs in the past 12 months, 20% said they received a pay increase while 16% took a pay cut to land a new job.
the great resignation is having mixed results
The shadow of rising inflation continued to play a major role in the financial decisions of most American consumers. The sharp increase in prices led to a nearly 10% increase in the number of people who noticed the effects of inflation this quarter over last quarter, with people feeling the most pain at the gas pump and the grocery store. Eight in 10 said inflation had an impact on their day-to-day finances. And one-third reported that inflation made a significant impact on their financial decisions.
Inflation is Front-and-Center, Covering Everything
People were also finding ways to supplement their take-home pay to cover the increased costs. 13 percent said they got a side hustle or second job on top of their regular full-time job in response to inflation. And one in 10 took on new debt to cover rising costs.
As with most things, debt made the effects of inflation even worse. Those with consumer debt were nearly twice as likely (40%) to say inflation had a significant impact on their day-to-day-finances compared to those who are debt-free (23%). Because of the rising prices caused by inflation, one in four people with debt cut back on the amount they put toward paying off their debt, and one in five relied on credit cards to buy something they would normally pay for with cash. However, one in four have also started budgeting to track their spending.
The stress caused by increased spending due to inflation also led to increased anxiety among consumers. A majority (60%) said they were anxious about how they were going to pay for the things because of inflation.
With prices rising on everyday goods and services, consumers looked for ways to lessen the impact on their family’s budgets by really thinking about the ways they spend money. Four out of five Americans said inflation significantly changed the way they shop for groceries, with 39% saying they cut back on non-essential grocery and food items. Nearly one-third said they either delayed or cancelled a future purchase.
Inflation changes grocery shopping behaviors
Compared to last year around the same time, people spent more on groceries, utilities, and transportation in Q1 of 2022. On the other end of the spectrum, people spent less on non-essential items like eating out, entertainment, and travel—though the number of people spending less on those items was decidedly fewer. For example, in the top spots on both ends, 57% said they spent more on groceries, but only 33% said they spent less on eating out.
Inflation also impacted summer vacation spending plans. While six in 10 were planning to travel this summer, half are increasing their travel budget or completely changing their travel plans to offset higher prices. Despite the increase in gas prices, 12% more people plan to drive to their destinations rather than fly.
Even though people have changed their spending habits to combat inflation, impulse buying remained common. More than a third of consumers in America admitted to making at least one impulse purchase in the last three months—the majority of which were food items found while shopping in a store. Nearly one quarter of consumers made impulse purchases on social media, with 30% of Millennials in particular admitting to these types of purchases.
Impulse buying habits also have a psychological component. Most people who made impulse purchases (60%) said they felt guilty about it—and 53% regretted making the purchase. Sixty-four percent (64%) said they were likely to make impulse purchases when stressed. However, among people who budget their money, 85% said budgeting helped control their impulse spending.
The popularity of buy now, pay later (BNPL) services remained steady despite increased inflation, with the number of people who used them hovering at around 21%. A majority of BNPL users (79%) preferred the service over using a credit card. But a majority (60%) also had trouble managing their payments. Two-thirds admitted they were still paying for an item they bought with a BNPL service even after they no longer owned the item.
BNPL users struggle to manage payments
The beginning of the year also brought launch of the 2021 tax season. Of the people who had filed their 2021 taxes at the time of the survey, seven in 10 expected to receive a refund.
In a possible reaction to the uncertain financial times, 47% said they plan to save their refund. And half said they would use their refund to cover bills—either paying everyday expenses or paying down debt.
In this time of financial uncertainty and worries about inflation, people are looking for sources they truly trust for advice on what to do with their money. The most popular sources of financial advice in the first quarter of 2022 were family (33%) and friends (25%). Four in 10 said they don’t have anyone to turn to for financial advice. Younger generations (Gen Z and Millennials) especially lacked trustworthy financial sources, with about half of them saying they had no one to turn to.
Consumers, especially the younger generations, increasingly looked to content on social media for financial advice. One third said they implemented financial advice they found from someone they follow on social media. YouTube had the most influence in all generations and was as popular as an actual financial advisor as a trusted source of financial advice. Gen Z was the most likely to get money advice from YouTube (43%), followed by Millennials (37%), Gen X (20%), and Baby Boomers (6%).
Americans’ interest in cryptocurrency continued to rise steadily. One in four investors said they had purchased crypto—up two percentage points from the previous quarter, and up 15 percentage points from the same time last year. Millennials lead the pack in crypto interest (40%), followed by Gen Z (37%), Gen X (23%), and Baby Boomers (2%).
Outstanding student loan debt was also a source of financial stress for Americans in Q1. Three-fourths of those who took out student loan debt are still paying on their loans. But, since the start of the COVID-19 pandemic in March of 2020, federal student loan payments have been paused by the federal government. With the pandemic getting further and further in the rear-view mirror, those payments were scheduled to restart in May 2022. Then the government extended the moratorium through August 2022.
The Q1 State of Personal Finance survey was conducted before the government announced the extension of the moratorium in August. At that time, four in 10 people with student loan debt said they were extremely worried about their loan payments restarting. And three in 10 said they weren’t prepared to start making payments again. Most borrowers (77%) are holding out hope that at least some of their student loan debt will eventually be forgiven.
Concern over student loan payments restarting
The 2021 Great Resignation brought on in the wake of the COVID-19 pandemic didn’t seem to lose any steam going into 2022. Less than half of Americans (40%) were extremely satisfied with their jobs, and half were considering changing their jobs—a result consistent with the last two times Ramsey Solutions surveyed this question in The State of Work and The State of Financial Wellness studies. There was also very little difference in current levels of satisfaction between those who changed jobs and those who didn’t. Among the generations, Gen Z (65%) and Millennials (60%) were the most likely to consider changing jobs.
Many employees are facing a change in their work situation as companies plan to transition workers back on-site work. Forty-five percent (45%) of fully remote workers said their employer plans to return employees to an on-site location soon. While a slim majority still listed their primary working environment as fully on-site (52%), those who have been working from home had grown accustomed to the freedom it brought them, and most would like to see that way of working continue. In fact, four in 10 fully remote workers said they would be extremely likely to quit their current job if it transitioned to a fully onsite role.
Remote workers’ views of on-site work
The remote working trend has also influenced the real estate market, as job location is now less of a factor when people are deciding where to live. Almost half (44%) said the ability to work remotely has impacted their decision about where to live, and over one-third (37%) said they moved away from where their job was based because of their ability to work from home.
Remote work impacts living decisions
However, with the real estate market’s surging prices and mortgage interest rates rising, there is also a lot of uncertainty. A majority of both buyers (46%) and sellers (43%) reported being pessimistic about the real estate market.
The current state of personal finance in America continues the upward trend of anxiety consumers have felt throughout 2022. Rising inflation is affecting every aspect of people’s lives—even how much families plan to spend on Christmas presents. With student loan payments restarting in January, the increased use of debt to pay for the basics, and a serious lack of savings, there’s a lot for Americans to worry about when it comes to their money.
However, the anxiety about money could be generational. Younger generations are feeling more anxious about money than their parents and grandparents—perhaps a product of perspective and experience with normal economic cycles.
The State of Personal Finance study is a quarterly research study conducted by Ramsey Solutions with 3,011 U.S. adults to gain an understanding of the personal finance behaviors and attitudes of Americans. The nationally representative sample was fielded from March 28 to April 5, 2022 (Q1), June 30 to July 8, 2022 (Q2), and from October 18 – 24, 2022 (Q3), using a third-party research panel.
About the author
Ramsey Solutions
Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.
The latest release of The State of Personal Finance from Ramsey Solutions takes a look back at 2021 to see how Americans’ attitudes, opinions and behaviors changed around their money.
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