The struggle is real

It’s lowkey becoming impossible to ignore: household budgets across the U.S. are getting absolutely wrecked. According to recent data from the Federal Reserve Bank of New York, people are falling behind on their payments at alarming rates.

We’re talking record-breaking numbers for seriously delinquent auto loans, and nearly 13% of credit card balances are seriously past due. That’s hitting levels we haven’t seen since the 2010 post-housing crisis era. It’s not just plastic and cars, either—mortgage delinquencies have climbed to a six-year high, and student loan payments are jumping as pandemic-era protections officially sunset.

Why it’s happening

Real talk: inflation has been hanging around for five years, and it’s living rent-free in everyone’s heads. A recent CBS News poll found that 90% of Americans say prices are the biggest thing shaping how they view the economy.

Kelly Regan, a certified financial planner at Girard, explains that credit cards have become a "safety valve" for people who have zero emergency savings left. When your paycheck isn't keeping up with the cost of living, that gap gets filled with debt. As Regan put it: "We're going to have a gap where things are going to cost more. And if you don't have any savings... you're going to accrue debt."

The outlook

People are definitely feeling the vibes, and they aren't good. A report from the University of Michigan noted that over half of consumers are planning to slash their spending on essentials like groceries and dining out. Joanne Hsu, director of the Surveys of Consumers, noted that "frustration over cost of living continues to mount," regardless of your political leanings. It’s giving major stress to families just trying to keep the lights on.

Why it matters

Even though big-picture numbers like GDP and unemployment look solid on paper, the day-to-day reality for millions is that their purchasing power is gone. Until wage growth can actually catch up to the cost of living, many households are stuck in a cycle of relying on credit just to cover the basics.