Amid the ongoing effects of inflation, Americans are making significant adjustments to their financial routines. A recent report by doxo reveals that although 65% of consumers feel some relief as inflation cools, 74% have modified their spending and saving behaviors over the past year. Despite some economic improvements, 85% of Americans remain as concerned—or more—about their financial stability compared to last year.
The How Americans Pay Their Bills report shows that the average U.S. household spends $25,513 annually, or 34% of their income, on essential household bills. As inflation continues to shape financial behavior, many consumers are finding it difficult to balance rising costs with stagnant wages.
Inflation’s Ongoing Impact
While inflation has eased slightly, it still looms over many households. Key findings include:
- 74% of Americans have changed their financial habits in the past year.
- 85% are equally or more worried about their ability to pay bills.
- Rising grocery costs have made it hard for 82% of households to keep up with bill payments.
- Nearly 65% of workers didn’t receive a meaningful salary increase, with wage growth remaining under 1% for many.
- In the event of a job loss, 58% of consumers believe they could only cover their bills for three months without their primary income source.
Utilities are the most concerning expense, with 58% of Americans listing them as their top worry. Auto insurance (50%), cable and internet (46%), and mobile phone bills (45%) also rank high on the list of financial concerns.
Bill Pay Strains on Household Budgets
With the cost of living rising, households are seeing their bills consume a significant portion of their income. On average, Americans spend 34% of their earnings on essential bills. The annual average bill spend of $25,513 reflects a slight increase from last year’s $24,557.
Emotionally, paying bills can feel like an achievement for some, with 35% reporting a sense of accomplishment. However, 17% say the process causes them anxiety.
Bill Payment Methods
Most households rely on cards to pay bills. 65% of payments are made using credit, debit, or prepaid cards, while ACH transfers account for 24% of payments. Interestingly, more than 70% of consumers prefer ACH for credit card and mortgage payments, but only 34% use it for rent.
Bill Payment Worries
Consumers have multiple concerns when it comes to paying bills, with 86% citing “stolen payment information” and “identity fraud” as their top worries. Concerns about “impact to credit score” follow closely at 85%. Other worries include late fees (70%) and overdraft fees (59%).
Who’s Paying the Bills
Women are more likely to manage household finances, making up 54% of bill payers, compared to 46% for men. Bill payments are most frequently made during the week, with Monday, Tuesday, and Friday being the most popular days.
How Americans Want to Improve Bill Payments
Consumers are looking for ways to make the bill-paying experience smoother. 60% would appreciate email reminders, while 57% would like to-do lists to help them stay organized. Additionally, 55% prefer using mobile apps to manage their payments.
Click here to view the full copy of the “How Americans Pay Their Bills” report.
