Research · Issue area · Financial Stability
Household Financial Stability
More than a third of U.S. adults say they could not cover a $400 emergency expense with cash or its equivalent. Which household conditions — income, available cash, debt, access to banking — best predict who falls into hardship, and what helps households recover?
Research on what keeps households financially steady: emergency savings, available cash, banking access and the everyday shocks that push families into hardship.
About this issue area
In the Federal Reserve's 2024 Survey of Household Economics and Decisionmaking (SHED), 63 percent of U.S. adults said they would cover a $400 emergency expense using cash or its equivalent, meaning more than a third would not. Separately, FDIC survey data show that about one in twenty U.S. households had no bank account in 2019–2023. These are measures of resilience, and they do not move in lockstep with income alone.
The Institute of FAME studies the conditions that predict financial hardship and recovery. Its current work tests whether a household's available cash — its liquidity — predicts hardship better than its income does, using nationally representative federal survey data.
Research questions in this area include: which measures of household finances best identify who is at risk of hardship; how short-term shocks, such as a car repair, a medical bill or a lost shift, spread into longer-term financial trouble; and which policies and products help households build and keep a cash cushion.
Plain-language explainer
What this means for you
A family can earn a decent living and still be one surprise away from trouble. A $400 car repair, paid with a credit card or a short-term loan, can turn into months of interest and missed payments. More than a third of American adults say they would not cover an expense that size with cash.
Most financial advice treats income as the whole story. Our research looks at what actually determines whether a household gets through a hard month: how much cash it can reach, what debts it carries, and whether it has a bank account at all. Your support funds research that helps educators, policymakers and the public focus on what really keeps families steady.
Forthcoming outputs
- — Working paper on liquidity versus income as predictors of household financial hardship (in preparation)
Policy audiences for this work
- Federal Reserve Board, Division of Consumer and Community Affairs
- FDIC, Division of Depositor and Consumer Protection
- U.S. Department of the Treasury, Office of Consumer Policy
- State banking and financial regulators
- Senate Banking Committee staff
- House Financial Services Committee staff
Other issue areas
Issue area · Fraud and Scams
Fraud and Scam Losses
Issue area · Older Adults
Older Adults' Financial Security
Issue area · Financial Education
Financial Education
Issue area · Financial Education Measurement
Behavioral Measurement in Personal-Finance Education
Issue area · FinTech Regulation
FinTech Regulatory Frameworks
Issue area · FinTech Consumer Protection
FinTech Consumer Protection
Issue area · CBDC and Digital Money
Digital Monetary Instrument Adoption