Walking the Pocketbook Tightrope: How Consumers Are Balancing Uncertainty and Spending

When economic winds shift, so do consumer spending habits. But not always in expected ways.

Amid tariffs, stubborn inflation and higher living costs, many consumers are walking a financial tightrope, juggling everyday expenses with unexpected needs and have-it-now desires. New data from PYMNTS paints a detailed and surprising picture of their evolving financial behaviors. The portrait reveals a recent shift in money management habits and a growing reliance on credit to bridge the gaps in an uncertain environment.

First, some basics. Our latest research underscores a stark divide in how individuals handle their finances, categorizing them broadly as either “planners” or “reactors.”

Planners take a strategic and proactive approach, consistently paying off credit card balances, amassing savings both short term and for the long haul and preparing for future expenses.

By contrast, reactors cope with their monthly bills on the fly as they arise, sometimes choosing which ones to pay. They typically carry higher credit card balances and have less saved, making them more reliant on credit when unexpected costs surface.

But lately, the balance between these groups is shifting. According to “New Reality Check: The Paycheck-to-Paycheck Report,” a recent PYMNTS Intelligence report, only 40% of consumers identified as planners in January 2025 — a roughly 20% plunge since February 2024, when roughly 1 in 2 were planners. The decline suggests more Americans are facing mounting financial strain.

Surprisingly, that shift to reactor is notable among higher-income earners making at least $100,000 a year; over 11 months since February 2024, the number of planners in that group plunged by 25%.

The upshot: More than 1 in 2 higher earners now fall into the reactor persona. This counterintuitive trend indicates that even Americans with six-figure earnings are facing new financial pressures — perhaps from inflation, rising living costs or “stage of life” expenses related to aging. Equally possible: Those affluent earners are adopting new spending patterns that increasingly crimp their wallets.

Want vs Need

The contrast between planners who have a handle on their personal finances and reactors who scramble to pay their monthly bills gets particularly interesting when considering when — and how — consumers open their wallets. It was the topic of a second recent report from PYMNTS Intelligence, “Managing Unplanned Expenses: How the Pay Later Economy Fits Consumer Needs,” which sheds light on how consumers deal with surprise spending, whether it’s impulse purchases or emergency expenses.

The findings reveal that more than 1 in 3, or 36%, of adult consumers splurged at least $250 on an impulse buy in the last three months. But nearly as many (35%) made an emergency purchase of the same amount in the last year. (The report used different survey time frames to optimize data quality.)

Unplanned retail spending — whether for that new sofa or emergency car repair — is a regular occurrence for most Americans of all income levels. Unsurprisingly, higher-income individuals are much more likely, at 44%, to make impulse purchases than are consumers with lower incomes. At the same time, those wealthier earners are nearly as likely at 41%, to have emergency expenses.

The biggest impulse shoppers tend to be younger consumers. Millennials dominate, with 47% making at least one spontaneous purchase in the last three months, followed by Gen Z and bridge millennials both at 42%. Those rates are far above those for Gen X or baby boomers. Parents with children are also top impulse buyers, matching millennials, compared to just 30% for other individuals.

Credit Over Cash

What’s notable is that regardless of whether the buys are wants or needs, consumers of all stripes pay for about half of their unplanned retail purchases using credit, mostly credit cards or buy now, pay later (BNPL) plans — indicating a growing reliance on credit solutions beyond traditional cards — rather than with cash.

Here are three key data points that underscore the current consumer financial landscape:

• Over half (52%) of high-income earners ($100,000+ annually) now fall into the reactor financial management persona, marking a shift away from proactive planning. This suggests that economic pressures or changing spending habits are impacting even those with higher incomes.
• Credit cards are the most common payment method for both impulse (35%) and emergency (33%) purchases of $250 or more, highlighting the crucial role of credit in managing unplanned expenses.
• Nearly three-quarters (73%) of Gen Z consumers are classified as reactors in their financial management approach, contrasting sharply with baby boomers who are majority planners (54%). This generational divide underscores differing financial priorities and strategies.

The data collectively paints a picture of consumers navigating a complex economic environment with varying degrees of preparedness and reliance on credit. While some maintain a proactive approach, a growing number, even among higher earners, are reacting to financial pressures as they arise.

The prevalence of unplanned expenses and the reliance on credit, particularly among younger generations, highlight the need for financial solutions that cater to diverse needs and promote both immediate flexibility and long-term stability. 

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