Board of Governors of the Federal Reserve System
Report on the Economic Well-Being of U.S. Households in 2018 - May 2019
Report on the Economic Well-Being of U.S. Households in 2018 - May 2019
Executive Summary
Economic Well-Being
Dealing with Unexpected Expenses
Banking and Credit
Housing and Neighborhoods
Higher Education
Student Loans and Other Education Debt
Description of the Survey
Dealing with Unexpected Expenses
Results from the survey indicate that many adults are not well prepared to withstand even small financial disruptions, though the ability to pay current bills and to handle unexpected expenses has improved markedly since 2013. Despite the positive trends, financial challenges remain, especially for those with less education and for minorities.
Small, Unexpected Expenses
Relatively small, unexpected expenses, such as a car repair or replacing a broken appliance, can be a hardship for many families without adequate savings. When faced with a hypothetical expense of $400, 61 percent of adults in 2018 say they would cover it, using cash, savings, or a credit card paid off at the next statement (referred to, altogether, as "cash or its equivalent")—a 2 percentage point increase from 2017 (figure 10). In 2013, half of adults would have covered such an expense in the same way.
Figure 10. Would cover a $400 emergency expense using cash or its equivalent (by survey year)
Accessible Version | Return to text
Among the remaining 4 in 10 adults who would have more difficulty covering such an expense, the most common approaches include carrying a balance on credit cards and borrowing from friends or family (figure 11). Twelve percent of adults would be unable to pay the expense by any means. Although so many incurring additional costs for a modest expense is disconcerting, it is possible that some would choose to borrow even if they had $400 available, preserving their cash as a buffer for other expenses.11
Figure 11. Other ways individuals would cover a $400 emergency expense
Accessible Version | Return to text
Note: Respondents can select multiple answers.
While the prior question asks about a hypothetical expense, the survey results indicate that a number of people struggle to pay their actual bills. Even without an unexpected expense, 17 percent of adults expected to forgo payment on some of their bills in the month of the survey. Most frequently, this involves not paying, or making a partial payment on, a credit card bill (table 10). Four in 10 of those who are not able to pay all their bills (7 percent of all adults) say that their rent, mortgage, or utility bills will be left at least partially unpaid.
Table 10. Bills to leave unpaid or only partially paid in the month of the survey
Make Full Screen
BillAmong adult populationAmong those who expect to defer at least one bill
Housing-related bills
Rent or mortgage422
Water, gas, or electric bill633
Non-housing-related bills
Credit card742
Phone or cable bill532
Student loan212
Car payment319
Unspecified bills425
Note: Respondents can select multiple answers. "Unspecified bills" reflects those who said they would not be able to pay bills in full but then did not answer the type of bill.
Another 12 percent of adults would be unable to pay their current month's bills if they also had an unexpected $400 expense that they had to pay. Altogether, 3 in 10 adults are either unable to pay their bills or are one modest financial setback away from hardship, slightly less than in 2017 (33 percent).
Those with less education in particular are less able to handle these expenses. Thirteen percent of adults with a bachelor's degree or more do not expect to pay their current month's bills or would be unable to if faced with an unexpected $400 expense, versus 42 percent of those with a high school degree or less. Racial and ethnic minorities of each education level are even less able to handle a financial setback (figure 12).
Some financial challenges require more preparation and advanced planning than a relatively small, unexpected expense would. One common measure of financial preparation is whether people have savings sufficient to cover three months of expenses if they lost their job. Half of people have set aside dedicated emergency savings or "rainy day" funds. As was the case with smaller financial disruptions, some would deal with a larger shock by borrowing or selling assets; one-fifth say that they could cover three months of expenses in this way. In total, 7 in 10 adults could tap savings, would need to borrow or sell assets if faced with a financial setback of this magnitude.
Figure 12. Not able to fully pay current month's bills (by education and race/ethnicity)
Accessible Version | Return to text
Health Care Expenses
Out-of-pocket spending for health care is a common unexpected expense that can be a substantial hardship for those without a financial cushion. As with the small financial setbacks discussed above, many adults are not financially prepared for health-related costs. During 2018, one-fifth of adults had major, unexpected medical bills to pay, with the median expense between $1,000 and $4,999. Among those with medical expenses, 4 in 10 have unpaid debt from those bills.
In addition to the financial strain of additional debt, 24 percent of adults went without some form of medical care due to an inability to pay, down from 27 percent in 2017 and well below the 32 percent reported in 2013. Dental care was the most frequently skipped treatment (17 percent), followed by visiting a doctor (12 percent) and taking prescription medicines (10 percent) (figure 13).
Figure 13. Forms of skipped medical treatment due to cost
Accessible Version | Return to text
There is a strong relationship between family income and individuals' likelihood of receiving medical care. Among those with family income less than $40,000, 36 percent went without some medical treatment in 2018, down from 39 percent in 2017. This share falls to 24 percent of those with incomes between $40,000 and $100,000 and 8 percent of those making over $100,000.
Health insurance is one way that people can pay for routine medical expenses and hedge against the financial burden of large, unexpected expenses. In 2018, 90 percent of adults had health insurance. This includes 57 percent of adults who have health insurance through an employer or labor union and 22 percent who have insurance through Medicare. Four percent of people purchased health insurance through one of the health insurance exchanges. Those with health insurance are less likely to forgo medical treatment due to an inability to pay. Among the uninsured, 38 percent went without medical treatment due to an inability to pay, versus 22 percent among the insured.12
 11. For example, Neil Bhutta and Lisa Dettling estimate in 2016, using the Survey of Consumer Finances, that 76 percent of households had $400 in liquid assets (even after taking monthly expenses into account), which is higher than the 56 percent of adults in the 2016 SHED who say they would cover a $400 expense with cash or its equivalent ("Money in the Bank? Assessing Families' Liquid Savings using the Survey of Consumer Finances," FEDS Notes (Washington: Board of Governors, November 19, 2018),​). David Gross and Nicholas Souleles first identified the "credit card debt puzzle" in which some households hold both high-interest credit card debt and low-return liquid assets that could be used to pay down those debts ("Do Liquidity Constraints and Interest Rates Matter for Consumer Behavior? Evidence from Credit Card Data," Quarterly Journal of Economics 117, Issue 1 (February 2002): 149–85.)  Return to text
 12. Since the survey asks respondents about their current health insurance status, but also asks about whether they missed medical treatments in the previous year, it is possible that some respondents who currently have insurance were uninsured at the point at which they were unable to afford treatment. Return to text
Last Update: May 28, 2019
About the Fed
News & Events
Monetary Policy
Supervision & Regulation
Payment Systems
Economic Research
Consumers & Communities
Financial Stability
Freedom of Information (FOIA)
Office of Inspector General
Budget & Performance | Audit
Website Policies | Privacy Program
20th Street and Constitution Avenue N.W., Washington, DC 20551
Expand sub-menuAbout the FedStructure of the Federal Reserve SystemPurposes & FunctionsBoard MembersAdvisory CouncilsFederal Reserve BanksFederal Reserve ActCurrencyBoard MeetingsBoard VotesDiversity & InclusionCareersDo Business with the BoardHolidays Observed - K.8Contact Requesting Information (FOIA)FAQsEconomic EducationFed Financial StatementsInnovationExpand sub-menuNews & EventsPress ReleasesSpeechesTestimonyCalendarVideos Photo Gallery ConferencesExpand sub-menuMonetary PolicyAbout the FOMCMeeting calendars and informationTranscripts and other historical materialsFAQsNotesPolicy NormalizationPolicy ToolsMonetary Policy ReportBeige BookQuarterly Report on Federal Reserve Balance Sheet DevelopmentsOverviewExpand sub-menuSupervision & RegulationCommunity & Regional Financial InstitutionsLarge Financial InstitutionsForeign Banking OrganizationsFinancial Market UtilitiesConsumer ComplianceFederal Reserve Supervision and Regulation ReportAll Reporting FormsRecent UpdatesInformation collections under reviewFinancial StatementsApplications/structure changeFederal Financial Institutions Examination Council (FFIEC)Municipal & Government SecuritiesBy YearBy TopicApplication ProcessBoard & Reserve Bank ActionEnforcement Actions & Legal DevelopmentsRegulationsManualsBasel Regulatory FrameworkVolcker RuleEducation, Training, and AssistanceBeneficial Ownership reportsLarge Commercial BanksU.S. Offices of Foreign EntitiesFinancial Holding CompaniesInterstate BranchingSecurities Underwriting & Dealing SubsidiariesMinority Depository InstitutionsExpand sub-menuPayment SystemsRegulation CC (Availability of Funds and Collection of Checks)Regulation II (Debit Card Interchange Fees and Routing)Regulation HH (Financial Market Utilities)Other Regulations and StatutesFederal Reserve's Key Policies for the Provision of Financial ServicesOvernight OverdraftsPayment System RiskSponsorship for Priority Telecommunication ServicesAutomated Clearinghouse ServicesCheck ServicesCurrency and Coin ServicesDaylight Overdrafts and FeesFedNow ServiceFedwire Funds ServicesFedwire Securities ServicesFiscal Agency ServicesNational Settlement ServiceSupervision & Oversight of Financial Market InfrastructuresDesignated Financial Market UtilitiesInternational Standards for Financial Market InfrastructuresPayment ResearchFederal Reserve Payments Study (FRPS)Payments System Policy Advisory CommitteeForumsExpand sub-menuEconomic ResearchFinance and Economics Discussion Series (FEDS)FEDS NotesInternational Finance Discussion Papers (IFDP)Meet the EconomistsFRB/US ModelEstimated Dynamic Optimization (EDO) ModelSurvey of Consumer Finances (SCF)Expand sub-menuData Data Download ProgramAggregate Reserves of Depository Institutions and the Monetary Base - H.3Assets and Liabilities of Commercial Banks in the U.S. - H.8Assets and Liabilities of U.S. Branches and Agencies of Foreign BanksCharge-Off and Delinquency Rates on Loans and Leases at Commercial BanksSenior Financial Officer SurveySenior Loan Officer Opinion Survey on Bank Lending PracticesLarge Commercial BanksMinority Depository InstitutionsStructure and Share Data for the U.S. Offices of Foreign BanksCommercial PaperFinance Companies - G.20New Security Issues, State and Local GovernmentsNew Security Issues, U.S. CorporationsSenior Credit Officer Opinion Survey on Dealer Financing TermsForeign Exchange Rates - H.10/G.5International Summary StatisticsSecurities Holdings and TransactionsStatistics Reported by Banks and Other Financial Firms in the United StatesStructure and Share Data for U.S. Offices of Foreign BanksFinancial Accounts of the United States - Z.1Consumer Credit - G.19Household Debt Service and Financial Obligations RatiosMortgage Debt OutstandingSurvey of Consumer Finances (SCF)Survey of Household Economics and DecisionmakingIndustrial Production and Capacity Utilization - G.17Selected Interest Rates - H.15Micro and Macro Data CollectionsFactors Affecting Reserve Balances - H.4.1Money Stock Measures - H.6Yield Curve Models and DataExpand sub-menuConsumers & CommunitiesCommunity Reinvestment Act (CRA)All RegulationsCA LettersEnforcement ActionsIndependent Foreclosure ReviewHousing and Neighborhood RevitalizationSmall Business and EntrepreneurshipEmployment and Workforce DevelopmentCommunity Development FinanceRural Community and Economic DevelopmentConferencesSurvey of Household Economics and DecisionmakingResearch Publications & Data AnalysisCommunity Advisory CouncilMortgage and Foreclosure ResourcesFederal Reserve Community Development Resources