Household Costs Outpacing Income Growth
New data from Navicore shows that housing and living expenses rose 6% in 2025, while average income increased by only 3%. This widening gap between essential costs and earnings indicates persistent financial strain on households. The data points to ongoing challenges for consumer spending and savings.
- The data originates from Navicore Solutions, a national nonprofit financial counseling agency that assists over 100,000 consumers annually. The findings are based on their 2025 analysis of individuals who sought their credit counseling services. - Navicore's analysis indicates that the financial strain is less about new debt and more about "structural affordability challenges," where the fundamental cost of living outpaces wage growth. - The average unsecured credit card balance among those seeking Navicore's help was approximately $33,000 in 2025, a level consistent with 2024. - Broader economic data from late 2025 supports this trend, showing that while overall consumer spending appeared resilient, many households were increasingly using savings and credit to manage expenses. - A widening gap exists between the spending habits of higher- and lower-income households, with higher earners, who account for more than half of consumer spending, more freely spending on discretionary items like travel and dining. - As of December 2025, the U.S. personal saving rate was 3.6% of disposable income. - Looking ahead, economic forecasts for 2026 project moderate GDP growth, with consumer spending expected to be a key driver. - Inflation, as measured by the Personal Consumption Expenditures (PCE) price index, is expected to continue a gradual slowdown in 2026.
