The Cutback Economy: How Americans Choose What to Drop and What to Defend

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Americans are reducing their spending, but in different ways. PYMNTS Intelligence finds that consumers are responding to cost pressures through three distinct patterns. Some are pulling back, some are using more financial tools, and others are maintaining their spending. The result is a Cutback Economy shaped less by age and more by the different ways people manage money under pressure.

Consumer Spending in the Cutback Economy

Spending Retreat

Sixty-six percent of Americans cut back on everyday spending.

Cutting back remains the most common response to rising costs, followed by avoiding large purchases. Proactive steps, such as adding income, increasing savings or negotiating bills, are used far less often.

Consumer Split

Thirty-four percent of Americans are reactive consumers.

This group is spending less, saving less and relying mostly on cutting everyday spending or avoiding purchases altogether. Proactive consumers make up 21% of the population, while balanced consumers, at 45%, are holding their spending steady or increasing it.

Boomer Divide

Boomer daily living pressure spans 31 points.

Among baby boomers and seniors, 69% of reactive consumers report daily living expenses as a challenge, compared with 38% of balanced consumers. The gap shows that financial behavior can separate consumers within the same generation more sharply than age does.

Protected Spending

Seventy-three percent of reactive consumers kept entertainment.

Even consumers who are cutting back don’t abandon every non-essential category. Among reactive consumers facing daily living pressures, 73% held onto entertainment spending, and 59% held onto dining out and delivery.

BNPL Planning

Forty-eight percent of proactive consumers used BNPL to cope.

BNPL use is highest among proactive consumers, not among the most financially squeezed group. Reactive consumers used BNPL at just 8%, suggesting that installment plans function more as planning tools than emergency tools.

Methodology

This Data Book is based on “The Cutback Economy: How Age, Behavior and Financial Pressure Shape Consumer Spending,” the June 2026 edition of the PYMNTS Intelligence Generational Pulse Report. The report is based on a survey of 2,283 U.S. adult consumers conducted from March 30-April 9, 2026. The sample was balanced to match the U.S. adult population by age, gender, education and income.

About

PYMNTS Intelligence is a leading global data and analytics platform that uses proprietary data and methods to provide actionable insights on what’s now and what’s next in payments, commerce and the digital economy. Its team of data scientists includes leading economists, econometricians, survey experts, financial analysts and marketing scientists with deep experience in the application of data to the issues that define the future of the digital transformation of the global economy. This multilingual team has conducted original data collection and analysis in more than three dozen global markets for some of the world’s leading publicly traded and privately held firms.

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