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Survey Data Reveals 1 in 6 Americans Can’t Make Their Monthly Bill Payments

by Varo Bank

January 21, 2020

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SAN FRANCISCO, January 23, 2020 — New data from a survey conducted by mobile banking company Varo Money, Inc confirms something that many have long speculated: the average American doesn’t have enough money to make ends meet. More than 1,100 participants across the country ages 18 to 75 provided responses, revealing the stress points in their personal budgets, as well as the amount of money they would need to feel more confident in the state of their financial health. The survey was based on questions prepared by Varo Money and conducted through SurveyMonkey. 

Keeping the Lights On

While the majority of Americans surveyed (69%) said they were spending 30% or less of their monthly income on housing, related costs took center stage in their ability to manage personal finances. More than one-third of people (35%) said that utilities were the biggest non-housing cost in their monthly expenditures, with nearly the same number (34%) saying that this is one of the key categories they wish they could reduce spending in. 

The vast majority of respondents, however, stated that their overall expenses have increased in the past 12 months (78%) and expect it to increase again in the next (71%), and utilities is one area where they may be least likely to find relief. The U.S. Energy Information Administration has forecast further growth in residential electricity prices in 2020 (source). 

What’s in the Fridge

Food budgets were considered the largest non-housing expense category (26%) behind utilities. Food was also the area that seemed to show the most flexibility: the money allotted for groceries and dining out is the most likely category to be overspent (54%), but also the most likely to be cut back when Americans can’t pay their bills (33%).

Regardless of whether it’s within budget, food is also an area that the majority (54%) of those surveyed feel they’re spending too much on. According to the Bureau of Labor Statistics, the average annual expenditure on groceries in the U.S. is $4,464 per person, while dining out runs Americans an average of $3,459 (source). Most respondents would prefer to cut back their overall food budget as it relates to both categories (52%).

Show Me the Money

Concerns about personal finance appear to be widespread: 79% of respondents were either somewhat or incredibly stressed about not having enough money to meet their needs today, let alone tomorrow. A whopping 90% of those surveyed said they do not feel like they are saving enough to cover unexpected expenses that may come up in the future. When asked how much more they’d need to feel confident about covering those needs, the dollar value wasn’t astronomical: 66% of respondents say they’d need, at most, an additional $500 in their budget each month to feel prepared for what’s to come. 

The Federal Reserve Bank reports that the median household income in the United States has seen continuous growth since 2015 (source), but the results of our survey indicate a clear disconnect between national trends and individual experience. The majority (63%) of respondents have either seen their income stagnate at the same level or decrease in the last 12 months. Despite this, people remain optimistic: 43% of survey respondents stated that they expect their income to rise steadily over the next five years. 

Robbing Peter to Pay Paul

One in six respondents (17%) said they simply do not have enough money to pay all of their bills each month. That’s a staggering number, but given their feelings on income, it’s not terribly surprising either: 32% said that their expenses are increasing faster than their income.

Without enough money to pay the bills, Americans are scrambling to find ways to cover the cost. The majority (51%) try to cover the financial gap by cutting back their budgets wherever they can. In other instances, they’ll dip into their savings (47%) and even borrow from family (15%). 

Borrowing from financial institutions is also a common practice, with 29% admitting to using credit cards to manage the financially unmanageable, 7% using payday cash advances, and 7% taking out personal loans.

“There is a clear struggle taking place for many Americans; it’s difficult to find financial confidence when there’s simply not enough money to go around,” said Colin Walsh, CEO of Varo Money. “Varo’s mission is to help ease these common financial burdens for our customers. Our banking solutions that have no monthly fees, including free checking accounts and zero-penalty overdraft, help ensure we serve all of our clients fairly no matter what their financial situation looks like. It’s difficult to get ahead and live without the constant burden of financial stress, and there’s no reason for unnecessary fees to hold you back even further.”

About Varo

Varo Money, Inc. (“Varo”) is on a mission to help people make progress with their financial lives. In one mobile app, Varo offers customers premium bank accounts that have no minimum balance requirement or monthly account fee, high-interest savings accounts, and tech-first features to help people save and manage their money more easily. As a fintech leader, Varo has been granted preliminary approval for a de novo national bank charter by the Office of the Comptroller of the Currency (OCC), and is working to become the first mobile-centric national bank in U.S. history. Varo Personal Loans are offered by Varo Money, Inc., under state licenses, subject to application approval. For more information, visit, like Varo on Facebook, and follow us on Instagram and Twitter @varomoney.

Bank account services provided by The Bancorp Bank; Member FDIC.


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