Less Than Half of Consumers Say They Could Handle a $1,000 Surprise Expense

A flat tire, a broken appliance or an urgent dental bill may look like a routine household problem. But for a growing share of Americans, small financial shocks now hit with the force of a crisis because there is little room left in the monthly budget.

That’s the central takeaway from “Running on Empty: How Paycheck-to-Paycheck Living Turns Small Shocks Into Big Crises,” a PYMNTS Intelligence report based on a survey of 2,465 U.S. consumers.

The report finds that about 2 in 3 consumers were living paycheck to paycheck at the end of 2025, but the more important shift is underneath that headline number: a rising share are doing so out of necessity, not preference.

The findings indicate that expense shocks are becoming a defining feature of household finances, especially for people already stretched by higher costs for food, housing, utilities and insurance.

40% of consumers were living paycheck to paycheck out of financial necessity in December 2025, up from 29% a year earlier. That suggests more households are reaching the point where income is consumed by essentials rather than optional spending.

Two-thirds of consumers who experienced a financial shock in the past year said their largest unexpected expense topped $1,000. More than half said they faced at least one large surprise expense, and paycheck-to-paycheck households were the most likely to face repeated emergencies.

Only 48.5% of all consumers said they were very or extremely confident they could cover a $1,000 unexpected expense without falling behind on other bills. Among consumers living paycheck-to-paycheck and struggling to pay bills, that figure fell to 22.4%.

What stands out in the report is not simply that Americans are under pressure. It is that the pressure is becoming more repetitive and more structural. For many households, unexpected expenses keep recurring, making recovery harder each time. The report notes that paycheck-to-paycheck consumers are especially likely to encounter smaller-dollar emergencies under $1,000. That matters because these are exactly the kinds of costs that arrive often enough to destabilize a tight budget but not always large enough to attract formal support or planning.

The good news is that the data also points to where resilience can be built. Across the broader population, liquid savings and personal loans remain the main tools people use to absorb emergency expenses. Households with stronger cash buffers and access to lower-cost credit are much less likely to spiral when something goes wrong.

The divide is clear, but so is the opportunity. Better short-term savings tools, wider access to affordable credit and products designed around real-world cash flow could help turn expense shocks back into temporary setbacks instead of lasting financial damage. Even in a strained environment, that is a practical path forward.

At PYMNTS Intelligence, we work with businesses to uncover insights that fuel intelligent, data-driven discussions on changing customer expectations, a more connected economy and the strategic shifts necessary to achieve outcomes. With rigorous research methodologies and unwavering commitment to objective quality, we offer trusted data to grow your business. As our partner, you’ll have access to our diverse team of PhDs, researchers, data analysts, number crunchers, subject matter veterans and editorial experts.