Americans Adjust Spending Amid Recession Fears

Navigating Financial Uncertainty: How Americans Are Adjusting Their Spending Habits (June 2025)

In the face of mounting economic uncertainty, a significant majority of Americans are reevaluating and adjusting their financial behaviors. A recent survey conducted by Talker Research, commissioned by Affirm, reveals that 77% of Americans have altered how they manage their finances due to current economic conditions. This shift underscores a collective move towards greater financial prudence and adaptability — one rooted in a growing awareness that the economic tides may be shifting, and fast.

While economists and policy experts debate the risk of a full-blown recession, the everyday American is already acting like it’s here. And for good reason. From higher grocery bills to elevated interest rates on credit cards and loans, consumers are feeling the pinch. These circumstances have led to widespread changes in how people spend, save, and plan — all in an effort to regain control over their financial future.

Embracing Predictability and Control

One of the most significant findings from the Affirm study is the strong desire among Americans for financial predictability and control. In a time of volatility, having a clear plan — and sticking to it — can offer much-needed peace of mind.

According to the survey:

• 50% of respondents are keeping more cash on hand to prepare for emergencies or unexpected costs — a modern-day version of the old-fashioned “rainy day fund.”
• 41% prefer fixed payments they can plan for monthly, whether it’s with subscriptions, buy-now-pay-later options, or debt repayment plans.
• 36% have shifted toward a more long-term perspective, aligning their budgets with future goals like homeownership, retirement, or paying down debt.

This move toward predictability marks a contrast from earlier years of pandemic-era spending, where stimulus checks and relief programs created a temporary surge in discretionary income. Now, many households are reverting to conservative, time-tested approaches to money management.

Strategies to Avoid Financial Pitfalls

In addition to prioritizing control, many Americans are focused on avoiding common financial traps that can lead to long-term debt or instability. The most significant changes include:

• 39% are proactively avoiding credit card interest and fees — a number that reflects growing awareness of how compounding interest can quietly drain resources.
• 28% are investing in financial literacy, through online tools, budgeting apps, or conversations with trusted advisors.
• 23% are switching to alternative payment options such as digital wallets, installment plans, or banking products with no hidden fees.

These shifts show that consumers are not just cutting back — they’re becoming more informed. Knowledge, it turns out, may be the most powerful financial tool of all.

Macroeconomic Pressures Driving Behavior

What’s fueling this behavior change? A mix of policy shifts, price increases, and economic signals that suggest turbulence ahead. Here are three major themes:

• Recession concerns are real: 58% of survey respondents said they believe a recession is inevitable, and many are acting accordingly — paring back on travel, luxury spending, and even everyday expenses.
• Tariff uncertainty: New and proposed tariffs from the U.S. administration are raising concerns about price increases on imported goods — especially in sectors like electronics, clothing, and food.
• Stubborn inflation: While inflation has cooled from its 2022 peak, prices remain elevated in key categories. The cost of living is still outpacing wage growth for many Americans, causing a gap that budgeting alone may not fill.

These macroeconomic factors are driving people to ask: “What can I control?” For many, the answer is their daily and monthly spending habits.

Generational Shifts in Financial Behavior

Not all Americans are adjusting their finances in the same way. The response to economic instability varies by generation, revealing deeper cultural and experiential differences in how people relate to money:

• Gen Z (ages 18–27): Many are adopting digital-first financial tools like budgeting apps, buy-now-pay-later services, and neobanks. They are the most likely to seek out financial education on social media or YouTube.
• Millennials (ages 28–43): Often managing families, mortgages, and debt, this group is highly focused on optimizing cash flow. They’re leading the charge in seeking predictable expenses and trimming discretionary spending.
• Gen X and Boomers (ages 44–70+): More likely to lean on experience, this group is emphasizing long-term planning and preserving retirement savings. They are less likely to experiment with new financial tools but more likely to have emergency savings already in place.

Understanding these differences is essential not just for financial institutions, but for businesses of all kinds that want to align their offerings with the needs of today’s cautious, conscious consumer.

The Role of Financial Tools and Services

The financial technology sector has responded swiftly to meet this new demand for control, transparency, and support. The growing popularity of budgeting and forecasting tools reflects consumers’ desire to see exactly where their money is going — and where it will be tomorrow.

Features that are gaining traction include:

• Automatic categorization of expenses, helping people see patterns they may have otherwise missed.
• Real-time balance forecasts, enabling users to spot when they might go negative or need to shift money between accounts.
• Proactive alerts, such as spending trend notifications or upcoming bill reminders, that help users take action before a problem arises.
• AI-driven insights, which can help users make sense of complex patterns — like seasonal overspending or slow savings growth — and suggest next steps.

At Bountisphere, we believe these tools aren’t just helpful — they’re essential. Especially when paired with a nonjudgmental, always-on Money Coach, users gain the confidence to navigate their financial lives without fear or shame.

Psychological Shifts: From Avoidance to Engagement

Another key takeaway from the survey is that people are more willing to engage with their finances than ever before. For years, financial anxiety kept many Americans from looking at their bank accounts or facing debt head-on. But now, economic instability is forcing people to confront reality — and many are choosing to engage instead of avoid.

That shift is deeply psychological. Financial wellness is often tied to emotional wellbeing. When people feel out of control with money, it impacts their sleep, their relationships, and even their performance at work. By contrast, even small steps — like building a budget or understanding your spending habits — can restore a sense of agency.

We’re seeing the rise of what some experts call “money mindfulness”: a state where people check in regularly with their financial status, reflect on spending values, and make intentional choices based on long-term goals.

What Financial Experts Are Saying

Many financial advisors and economists support this new behavioral trend. As Nouriel Roubini — once nicknamed “Dr. Doom” — recently noted, he now sees opportunities for long-term U.S. growth, particularly if individuals continue adapting in smart ways. Other experts stress that inflation and trade pressures will continue to affect prices, but that smart financial planning can cushion the impact.

In particular, experts recommend:

• Reviewing and adjusting your budget at least once a month.
• Tracking variable spending, such as dining out or streaming services, which often balloon unnoticed.
• Paying down credit card debt strategically, starting with the highest interest rates (the “avalanche method”) or the smallest balances (the “snowball method”).
• Building a 3-month emergency fund — even slowly, over time.
• Using digital tools that automate savings, alerts, and financial check-ins.

Conclusion: Resilience Through Adaptation

The American financial landscape is changing — and people are rising to meet it. By embracing budgeting, seeking out financial literacy, avoiding unnecessary fees, and making proactive adjustments, individuals are taking ownership of their future in a time of uncertainty.

This new chapter in consumer behavior isn't just about cutting back — it's about growing up financially, collectively. With the right tools, support, and insights, Americans can move from reaction to strategy, from fear to confidence. The future may be uncertain, but with informed, engaged habits, we can face it prepared.

Note: This article is based on a survey conducted by Talker Research and commissioned by Affirm, as reported by the New York Post on June 4, 2025.