LendingClub Corporation (NYSE: LC), the parent company of LendingClub Bank, America’s leading digital marketplace bank, today released findings from the 23rd edition of the Reality Check: Paycheck-To-Paycheck research series, conducted in partnership with PYMNTS. The Emergency Spending Deep Dive Edition examines the impact of financial stressors, such as emergency spending, on consumers’ ability to manage expenses and put aside savings as well as the rising trend in unexpected expenditures among young and affluent consumers. The series draws on insights from a survey of 3,620 U.S. consumers conducted from May 3 to May 18, as well as analysis of other economic data.
In May 2023, the Federal Reserve released the “Economic Well-Being of U.S. Households in 2022,” the latest edition of an annual report often used in measurements of financial well-being.1 Since 2013, these annual reports have tracked consumers’ stated ability to afford a theoretical $400emergency expense — a number that seems outdated in today’s economic environment.
LendingClub and PYMNTS have examined this topic since 2022 and have found that the $400benchmark does not accurately reflect today’s consumer experience. In fact, two-thirds of the unexpected expenses* consumers experienced cost more than the benchmark of $400, with 41% spending double that amount or more. Furthermore, the average emergency expense was approximately $1,700, reflecting a year-over-year growth of 16%.
“It’s very clear that the $400 emergency expense benchmark is no longer an accurate figure to use when assessing a consumer’s overall financial well-being as it doesn’t factor in inflation over the last decade or address the macroeconomic volatility we’ve seen since the beginning of the pandemic,” said Alia Dudum, LendingClub’s Money Expert. “Despite their best efforts to live within their means, consumers face unexpected expenses regularly that stress their budgets and impact their ability to meet their…
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