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Board of Governors of the Federal Reserve System
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Report on the Economic Well-Being of U.S. Households in 2014

Executive Summary

As the economy of the United States continues to rebound from the Great Recession, the well-being of households and consumers provides important information about the scope and pace of the economic recovery. In order to monitor the financial and economic status of American consumers, the Federal Reserve Board began conducting the Survey of Household Economics and Decisionmaking in 2013 and conducted the survey for a second time in October 2014. The findings from the October 2014 survey are covered in this report. Topics examined in the survey include the financial health of individuals on a number of levels, such as overall well-being, housing, economic fragility, savings and spending, access to credit, education and student loans, and retirement planning.

Key Findings

Overall, since the previous survey in 2013, individuals and their families experienced only mild improvements in their overall well-being, but they are increasingly optimistic about the trajectory of their well-being going forward.

  • Sixty-five percent of respondents report that their families are either "doing okay" or "living comfortably" financially, compared to 62 percent in 2013.
  • Forty-nine percent of part-time workers and 36 percent of all workers would prefer to work more hours at their current wage if they were able to do so.
  • Twenty-nine percent of respondents expect their income to be higher in the year after the survey than in the year prior to the survey. In the 2013 survey, 21 percent of respondents expected their income to increase.

The survey also asks questions about a number of specific aspects of individuals' financial lives:


Most renters express a preference for homeownership. Homeowners are generally optimistic about the trajectory of their home values. However, many renters, and especially lower-income renters, indicate that financial barriers to homeownership prevent them from purchasing a home.

  • The most common reasons renters cite for renting rather than owning a home are a perceived inability to afford the necessary down payment (50 percent) or a perceived inability to qualify for a mortgage (31 percent).
  • Forty-three percent of homeowners who have owned their home for at least a year believe that the value of their home is higher than it was in 2013, 37 percent believe the value is about the same, and 13 percent believe that it is now lower.
  • Fourteen percent of homeowners with a mortgage believe that they owe more on their mortgage than their house is worth, while 70 percent report that the value of their home exceeds the amount of their mortgage.

Economic Fragility

Although the survey finds that economic hardships are common, many individuals are ill-prepared for a financial disruption and would struggle to cover emergency expenses.

  • Forty-seven percent of respondents say they either could not cover an emergency expense costing $400, or would cover it by selling something or borrowing money.
  • Thirty-one percent of respondents report going without some form of medical care in the 12 months before the survey because they could not afford it.
  • Just under one-quarter of respondents indicate that they or a family member living with them experienced some form of financial hardship in the year prior to the survey.

Savings and Spending

Most respondents report that they saved at least some of their income in the past year, although a sizeable minority indicate that their spending exceeds their income.

  • Twenty percent of respondents report that their spending exceeded their income in the 12 months prior to the survey.
  • Sixty-three percent of respondents indicate that they saved at least some money in the past year.

Banking and Credit

A majority of individuals believe that credit is available to them should they desire it. However, a sizeable minority of those who applied for credit report that they experienced difficulties getting approved.

  • Sixty percent of respondents indicate they are either somewhat or very confident they would be approved for a mortgage if they were to apply.
  • Just under one-third of those who applied for credit in the 12 months prior to the survey were turned down or given less credit than they applied for.
  • Seventy-six percent of respondents have at least one credit card. Of those with a credit card, a slight majority (56 percent) report that they always paid their credit card bill in full in the previous year.
  • One-fifth of respondents have no bank account or have used some form of alternative financial service in the past year.

Education and Student Loans

The perceived value of a postsecondary education varies widely depending on program completion, type, and major. In addition, respondents who fail to complete a degree are disproportionately likely to fall behind on their student loan payments.

  • Twenty-three percent of adults report currently having education debt of some kind, with 15 percent of all respondents having such debt for their own education, 6 percent for their spouse's/partner's education, and 6 percent for their child's or grandchild's education.
  • Education debt is not exclusively financed through student loans, as 14 percent of respondents with education debt report that they have credit card debt from educational expenses, 5 percent used a home equity loan to pay for education, and 11 percent have some other non-student loan debt that was used to pay for education.
  • Among respondents who borrowed for their own education, those who failed to complete an associate degree or bachelor's degree, those who attended for-profit institutions, and those who were first-generation college students are more likely to be behind on their payments than others.
  • Family responsibilities are the most common reason given for not completing a degree after starting college, cited by 38 percent of the respondents who dropped out as a reason for not continuing their education.


Many individuals report that they are not planning for retirement and not saving for retirement. Additionally, even among those who are saving, respondents indicate that they lack confidence in their ability to manage their retirement investments.

  • Thirty-nine percent of non-retirees have given little or no thought to financial planning for retirement and 31 percent have no retirement savings or pension.
  • Over one-half of non-retirees with self-directed retirement accounts are either "not confident" or only "slightly confident" in their ability to make the right investment decisions when investing the money in these accounts.
  • Forty-five percent of non-retirees who plan to retire expect to continue working in some capacity during retirement to generate additional income to cover expenses.

Differences in Well-Being by Household Income Level

Across a range of dimensions, individuals in lower-income households express a higher frequency of financial challenges. These lower-income respondents are less prepared for financial hardship, less likely to be saving, and more likely to expect to never stop working.

  • Twenty-two percent of respondents with a household income under $40,000 expect that their income will be higher in the 12 months following the survey, whereas 36 percent of those whose income is over $100,000 expect income growth over the same period.
  • Over two-thirds of respondents with a household income under $40,000 report that they would sell something or borrow money to cover a $400 emergency expense or could not cover the expense at all.
  • Among respondents who save, those with a household income under $40,000 are most likely to be saving for unexpected expenses, while those with an income over $100,000 are most likely to be saving for retirement.

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Last update: June 9, 2015

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