The Precarious State of Family Balance Sheets

This report seeks to develop a clear picture of the current state of household financial security. It explores the ways three components of family balance sheets—income, expenditures, and wealth—have changed over the past several decades, how they interrelate, and why understanding family finances requires that they be examined together.

The study reveals a striking level of financial fragility: Despite the national recovery, many families have experienced minimal wage growth, have few savings, and could not withstand a financial emergency. This reality must begin to change if the American Dream is to remain alive and well for future generations.

Key Findings


    2% Total growth in earnings for typical U.S. worker from 1999-2009.

    Earnings growth has changed little in the past decade. By comparison, it was 22 percent for the typical worker between 1979 and 1999.


    9 days Length those at the bottom of the income ladder can survive on liquid savings.

    The majority of American households can replace less than one month of their income through liquid savings. Low-income families are particularly unprepared for emergencies.


    70% of U.S. households face financial strains on income, expenditures, or wealth.

    Many families confront not just one but two or even all three of these challenges.


    6% growth in average household expenditures since 1984, after adjusting for inflation.

    Average annual household expenditures show only modest change over the past several decades. However, this is largely due to the outsize impact of the Great Recession, which eroded 20 years of consumption growth and pushed spending back to 1990 levels.


The extended key finding text under “Expenditures” was updated on Feb. 5, 2016, to remove misplaced language that referred to certain types of savings and replace it with information about household spending.


Nearly half of households experience an income gain or drop of more than 25 percent in a given two-year period, a rate of volatility that has been relatively constant since 1979.

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Media Contact

Benny Martinez

Officer, Communications


Related Experts

Erin Currier

Erin Currier directs projects on family financial security and mobility at The Pew Charitable Trusts. The project conducts original research to assess differences in family balance sheets across diverse U.S. households and the degree to which Americans’ short-term economic security relates to their longer-term economic mobility.