Income and Savings

An important measure of economic well-being is whether people feel that they have sufficient income to cover their expenses without incurring debt. To capture the extent to which individuals feel that they are able to both pay current expenses and save for the future, the survey asks a series of questions related to their income, income sources, and rate of savings. Just under half of adults saved at least some of their income in the year prior to the survey, and just under one-third had spending equal to their income. The survey also considers the frequency of income volatility, observing that income volatility is reported more frequently--and more likely to be reported as a source of economic hardships--by blacks and Hispanics than it is by whites.

Income Amounts and Sources

Survey respondents are asked about the income that they and their spouse or partner received in the previous year from all sources. Recognizing that respondents may have imperfect recall about their income, and that some individuals are sensitive about reporting their precise income level, they are asked to provide this information in income ranges.

Twenty-eight percent of respondents report that their income in the last 12 months was less than $25,000, and 40 percent report that their income was less than $40,000 (figure 9).20 Consistent with that observed in other datasets and in previous years of the SHED, the distribution of incomes varies based on individual demographic characteristics, including age, race, and urban/rural status (see box 3).

Respondents are also asked about the sources of income that they and their spouse received. While wages and salaries are the dominant form of income for many families, 64 percent of adults report that they or their spouse or partner received at least some form of non-wage income (including that from self-employment).21

The common forms of non-wage income differ across the life-course, however. Among young adults (ages 18 to 29), freelance and hobby income was the most commonly received non-wage income (table 9). Among the older cohorts, freelance income declines in prevalence with age, but interest, dividend, and rental income becomes more common. Additionally, those who are at or near retirement (age 60 and older) commonly report receiving Social Security and pension income. (The sources of income among retirees is discussed further in the "Retirement" section of this report.) Each of these observations is consistent with that seen in the 2015 survey.

Table 9. Income sources received by respondent and/or their spouse or partner in the past 12 months (by age)


Income source 18-29 30-39 40-49 50-59 60+ Overall
Wages or salaries 71.9 83.0 86.0 75.3 37.6 67.2
Self-employment 10.4 13.2 17.4 18.0 12.7 14.1
Freelance work or hobbies 19.0 17.5 11.9 10.3 8.1 12.9
Interest, dividends, or rental income 13.9 21.6 26.6 29.6 40.2 27.4
Social Security 2.8 6.3 5.8 12.8 75.9 25.8
Supplemental Security (SSI) 1.9 4.8 4.8 6.1 3.5 4.1
Unemployment income 3.1 5.3 3.0 3.9 2.0 3.3
Pension income 0.7 2.8 2.6 12.3 50.8 17.3
Any other income 8.2 8.1 7.3 10.4 17.5 11.0

Note: Respondents can select multiple answers.

Box 3. Income Profiles by Demographic Groups

Comparisons in this report are often made based on the income of the respondent or based on other demographic characteristics that are correlated with income. The relationships between income levels and several of these demographic characteristics are further explored here.

Consistent with that seen in other data, including the Census Bureau's Current Population Survey, the family income of survey respondents is correlated with several individual and demographic characteristics that are considered in this report. For instance,

  • young respondents (ages 18 to 29) are disproportionately likely to have a family income less than $40,000, as are respondents with lower levels of education (table A);
  • single respondents--and particularly single women--are more likely to have lower levels of income than are their married counterparts; and
  • non-Hispanic black and Hispanic respondents are more likely to report lower levels of income than are non-Hispanic white respondents.

Furthermore, incomes vary based on whether the respondent lives in an urban area. These relationships between income levels and individual characteristics are valuable to remember when considering the links between individual characteristics and the financial well-being measures that are discussed in this report.

Table A. Family income levels (by demographic characteristics)


Characteristic Less than $40,000 $40,000-$100,000 Greater than $100,000
18-29 67.1 24.5 8.3
30-44 30.5 39.3 30.2
45-59 29.0 36.7 34.2
60+ 40.0 40.7 19.3
High school degree or less 54.8 36.1 9.0
Some college, certificate, or associate degree 44.3 37.9 17.7
Bachelor's degree or more 20.2 33.5 46.3
White, non-Hispanic 35.1 37.9 27.0
Black, non-Hispanic 52.8 31.5 15.8
Hispanic 54.0 33.5 12.5
Gender and marital status
Single women 67.5 26.2 6.3
Single men 62.1 28.8 9.1
Married couple 20.5 42.8 36.7
Urban/rural status
Urban 39.3 35.5 25.2
Rural 47.4 38.2 14.5
Overall 40.4 35.9 23.7

Spending Relative to Income

When asked how their spending compares to their income, 47 percent of adults report that they spent less than they made in the last 12 months. A further 31 percent report that their spending was equal to their income, whereas 16 percent spent more than they earned and 6 percent had no income at all. The 47 percent of adults who are saving at least some of their income is comparable to the 48 percent who reported saving at least some of their income in 2015.

In order to better understand the financial circumstances of those who spend more than they earn, a follow-up question in the survey asks these individuals how they covered expenses that exceeded their income in the preceding year. Sixty percent of those in this situation say that they spent from their savings, half borrowed money, and 41 percent relied on friends and family. About 45 percent of people who spent more than they earned select multiple options, indicating that they used more than one of these approaches to cover their spending.

Income and Spending Volatility

While many economic surveys, including the SHED, focus their analysis on one-year periods, summing one year's worth of income and expenses may mask substantial volatility that occurs for some families on a monthly basis. In order to assess this volatility, the SHED asks people about the level of consistency of their income.

Two-thirds of adults report that their income is roughly the same from month to month, 22 percent indicate that their monthly income varies occasionally, and 10 percent report that their income often varies quite a bit from month to month.

When asked for the reasons their income varies, 43 percent say that it is due to an irregular work schedule--which far surpasses the amount that comes from any of the other factors considered (figure 10). Although some variability may be due to positive events, bonuses (15 percent) and investment income (9 percent) are each less frequently mentioned as causes for monthly variability in income than irregular work schedules.

Figure 10. Reasons that income changed from month to month in the past year
Figure 10. Reasons that income
changed from month to month in the past year
Accessible Version | Return to text

Note: Among respondents whose income varies somewhat or quite a bit from month to month. Respondents can select multiple answers.

Recognizing that income fluctuations may be innocuous for some individuals but may cause financial stress for others, the survey also assesses the relationship between income volatility and economic hardship. It does so by asking those who indicate at least some variation in their monthly income a follow-up question inquiring whether they had any months when they struggled to pay their bills because of this volatility. Overall, 13 percent of adults (40 percent of those with volatile incomes) report that they struggled to pay their bills at least once as a result of income volatility.

Income volatility--as well as the potential for hardship from that volatility--is disproportionately common among black and Hispanic individuals. While 70 percent of white adults report that their income is roughly the same each month, 60 percent of blacks and 59 percent of Hispanics report this level of stability. Similarly, 19 percent of blacks and 18 percent of Hispanics report that they have some months in which they struggle to pay their bills due to income volatility, compared to 11 percent of whites.

The higher likelihood of having experienced a hardship from volatility among black and Hispanic adults remains apparent when controlling for education. For example, among people with a high school degree or less, 20 percent of black adults and 19 percent of Hispanics report having experienced difficulty paying bills due to income volatility in the prior year--compared to 14 percent of whites with this level of education experiencing this challenge due to income volatility (table 10). The differences in the likelihood of struggling to pay bills due to income volatility by race and ethnicity also persist after controlling for the education, age, gender, marital status, urban/rural status, and region of the country.


Table 10. Income volatility and difficulty paying bills from that volatility (by education and race/ethnicity)


Characteristic Roughly the same income each month At least some volatility - no impact on paying bills At least some volatility - struggle to pay bills as a result
High school degree or less
White, non-Hispanic 69.5 15.5 14.0
Black, non-Hispanic 56.7 22.5 20.4
Hispanic 57.5 20.8 19.3
Overall 65.5 17.6 15.7
Some college or associate degree
White, non-Hispanic 67.0 19.6 12.6
Black, non-Hispanic 60.2 19.0 20.1
Hispanic 55.5 23.0 20.3
Overall 64.3 20.1 14.8
Bachelor's degree or more
White, non-Hispanic 74.5 19.8 5.4
Black, non-Hispanic 64.7 18.3 15.8
Hispanic 70.5 16.2 12.6
Overall 73.2 19.2 7.1
Overall 67.6 18.9 12.7




 20. When comparing the income distribution of SHED respondents and their spouse or partner to that seen in the 2016 March Current Population Survey, the two series are largely similar, although the SHED observes more respondents with family incomes between $40,000 and $200,000 and fewer with incomes between $5,000 and $39,999. Recognizing that the household income distribution closely matches the March Current Population Survey, this may partially reflect that unmarried partners in the SHED are asked about the income that they and their partner receive, whereas the Current Population Survey treats these individuals as two separate families. It also may reflect some SHED respondents who report their household income rather than just their own and their spouse's incomes. Return to text

 21. The fraction of families with income from sources other than wages and self-employment is 60 percent. Return to text

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Last Update: June 14, 2022