US workers’ sense of financial security regresses to 2024 levels, says BofA survey. Why so many have lost their confidence — and what to do about it

While the state of the economy is often discussed in terms of dollars and cents, consumer confidence matters. When consumers are nervous about their finances, they often spend less, which can have a ripple effect on the economy at large.

Are financial fears justified?

It's easy to feel like the economy is spiraling when your social media feed is packed with posts about rising prices [2], but the broader picture is a little more nuanced.

The US annual inflation rate held steady at 2.7% in July 2025 [3]. That’s higher than the Federal Reserve’s 2% target but nowhere near the double-digit levels Americans experienced in the early 1980s [4]. Additionally, the Consumer Price Index — a measure of the average price change for goods and services — rose just 0.2% from the prior month [5].

Gas prices, another common barometer of consumer sentiment, averaged $3.20 per gallon nationwide in September, according to AAA [6]. That’s seven cents higher than last month but just slightly lower than the $3.21 average a year ago.

In other words, while prices are still rising, there is some indication the economy might not be as bad as many consumers think. Still, national data doesn’t always match personal experience. If your rent just went up $200 a month or you’re juggling a car loan and credit card payments, the numbers on a government chart won’t erase your stress.

How to manage financial stress

Even if the economy isn't as dire as the headlines suggest, Americans are carrying more debt. According to Market Watch, household debt reached an all-time high of $18.2 trillion this year, with 45% of Americans carrying credit card debt [7]. So, what can you do to manage financial stress? Here are a few steps you can take.

Get a clear picture of your finances

Start by writing down what you earn, what you owe and what you spend each month. Seeing everything in black and white helps you identify where your money is going and where you might be able to cut back. Lack of clarity won't help you make smart financial decisions, so you want to know exactly where you stand financially at the moment.

Set a budget

A budget doesn’t have to be restrictive. Think of it as a plan to put every dollar to work and for how you want to use your money. Start with fixed expenses, such as rent, utilities and debt payments. Then, decide how much you’ll allocate for savings, food and nice-to-have items, like date nights or your favorite hobbies. If you struggle to stick to a budget, consider using the paper envelope method or a budget app to help you stay on track.

Build an emergency fund

Lacking an emergency fund can keep you stuck on the debt wheel. Even if you pay off thousands of dollars in debt, you could still be one flat tire or unexpected medical bill away from landing back in debt. The ideal cushion is three to six months’-worth of expenses, but don’t get discouraged if that feels out of reach. Even $500 to $1,000 can give you breathing room and keep life’s little surprises from becoming long-term financial setbacks. Some is better than none.

Set small, achievable goals

It's easy to get overwhelmed if you're trying to pay off thousands of dollars in credit card debt or build a six-month emergency fund. Break your goals down into smaller milestones, like paying off one credit card or saving $500. And when you reach those goals, celebrate! Small successes help build momentum.

Get support

Managing money (especially debt) can feel isolating, but you don’t have to do it alone. A financial advisor can help you build a realistic plan, while a mental health professional can help you manage the stress that comes with financial strain. Even talking with a trusted friend can help put things in perspective.

The numbers show that inflation is cooling and gas prices are relatively stable, at least for now. But that doesn't mean that Americans aren't struggling. By focusing on what you can control — like sticking to a budget and building savings — you can reduce your stress and make steady progress towards your financial goals.

Article sources

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[1]. Bank of America. “2025 workplace benefits report: shining a light on employee wellness in uncertain times”