Consumers Worry That Income Isn’t Keeping Up With Inflation

To gain insight into the financial situation of individuals during 2024, Prosper Marketplace, a peer-to-peer lending platform, surveyed 1,009 U.S. adults who made financial decisions for their households. The “Economic Perceptions & Personal Finance” study explored what happened to people’s finances in 2024, how the trends compared with 2016 and what steps could help improve people’s overall personal financial health.

“No one can serve consumers effectively without knowing what their concerns and needs are, and how they have evolved over time,” said David Kimball, CEO of Prosper Marketplace, in a report summarizing the study. “The results of our latest survey indicate that consumers are less confident about their finances than they were eight years ago, and less than half believe conditions will improve within the next five years.”

Economic Perceptions

Among respondents, 45% felt the economy had worsened since the COVID-19 pandemic, but 48% thought things would improve in the next five years. Men were more optimistic (55%) than women (41%).

In 2024, perceptions of income keeping pace with inflation varied significantly across demographics. While 39% of men believed their income had kept up with inflation, only 28% of women felt the same. Confidence was even lower among older adults, with just 23% of respondents aged at least 55 agreeing that their income had somewhat kept up with inflation.

Economic factors significantly influenced consumer spending habits, with 32% of respondents citing inflation as the most impactful factor, highlighting widespread concern about rising prices. Grocery prices (20%) and income levels (12%) also played key roles in shaping spending behavior. In contrast, factors like geopolitical events (18%), the labor market (15%) and health crises (12%) were seen as less influential.

Investment Gaps

Most Americans were not investing: 68% of respondents reported having no current investments to build wealth.

Among those who did invest, the most common choices retirement funds (56%), followed by stocks (49%), high-yield checking or savings accounts (31%) and certificates of deposit (29%). Peer-to-peer lending ranked lowest at 4%.

Low investment levels persisted across age groups, with only 32% of respondents reporting that they held any investments. Younger adults (ages 18 through 34) showed the lowest participation at 19%, compared with 32% of those aged 35 through 54 and 43% of adults aged at least 55.

Debt Troubles

Credit card debt rose fast, according to the survey: In 2024, 63% of users said they could not pay off their balances in full, up sharply from 45% in 2016.

According to the Federal Reserve, Household debt rose by $147 billion in the third quarter of 2024, reaching $17.9 trillion and driven largely by increases in mortgage, credit card, auto and student loans.

The Prosper Marketplace survey highlighted growing concerns related to credit card debt: 63% of users reported being unable to pay their balances in full each month. Additionally, 28% of those with debt missed at least one payment in the past year, and about 8.8% of balances were delinquent.

Living Paycheck to Paycheck

People felt stretched even more than in the past: In 2024, 57% of respondents reported living paycheck to paycheck, compared with 48% in 2016. Financial awareness remained high, with 82% saying they are aware of their financial standing. However, only 46% felt they had the financial freedom to make enjoyable purchases, and 57% felt in control of their finances.

Gender status revealed key disparities: 62% of women said they live paycheck to paycheck, as opposed to 52% of men, and only 59% of women felt in control of their finances, as compared with 72% of men.

Low Financial Confidence

Only 42% of respondents felt confident they could handle a financial emergency.

When it came to understanding how money worked, women and older adults fell behind. Only 40% of women in the survey said they felt confident about their knowledge of the U.S. economy, compared with 56% of men. The gap grew even wider when the survey delved into income and inflation. While 39% of men thought their income had kept pace with rising prices, only 28% of women felt the same. 

Many survey respondents expressed a desire for more practical, relevant financial tools and guidance—such as clearer investment education, user-friendly budgeting apps and better access to employer-sponsored financial planning services.