After years of high prices and economic pressure, many Americans are starting to see real signs of financial progress. Net worth is climbing, 401(k) balances are up, and an increasing number of people are contributing to long-term goals including retirement and home ownership.¹ The Federal Reserve’s Q4 2024 Flow of Funds report indicates household net worth hit a new record of $169.4 trillion at the end of last year.² That includes equity gains in stocks and real estate, which may indicate broader asset strength.

Americans face a complex financial picture

According to a new Federal Reserve report on the economic well-being of Americans, based on 2024 data, 72% of U.S. adults say they're “doing okay” or better financially — a rebound from the lows of 2022, when inflation peaked and consumer confidence fell. But that still leaves more than a quarter of the country in some degree of financial uncertainty.^3,4

Some people who report doing fine may still be triangulating financial decisions behind the scenes. Travel, restaurants, and shopping remain popular, but overall spending is flattening, which may mean households are choosing dollar-by-dollar on spending on what matters most.⁵ Average credit card spend dipped slightly to $6,270 per month in 2024, down from $6,444 in 2023.

This coexistence of confidence and constraint may seem at odds — but the fact that people are comfortable spending may indicate a recovery in process. And positive momentum may finally be sticking.

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Signs of progress

Amid positive overall economic news, the national personal saving rate reached 4.9% in April 2025, up from 4.1% in January, which may support the idea of a growing focus on financial buffers over discretionary spending.⁶ People may be capitalizing on these saver-friendly rates. Sixty percent of Americans say increasing their emergency savings is their top goal.⁷

In terms of emergency funds, Baby Boomers have a median savings of $1,000 at the ready; the average Gen Xer has about $868; and Millennials and Gen Zers have $500 and $200, respectively. The ability to save isn’t a given for all Americans, however. Still, more than one in five Americans have no emergency savings at all, and nearly 30% have depleted their emergency savings and are trying to replenish it. 

While some people are looking to make sure they’re able to cover immediate expenses, long-term planning also hasn’t fallen off, even in a higher-cost environment. The average 401(k) balance rose by 8.5% across all savers in 2024, with Millennials averaging 13.7% growth. 

Resilience in the face of inflation

Inflation has cooled from its 2022 peak, but it remains a challenge for many.⁸ Almost two-thirds (62%) of Fed survey respondents said higher prices have “worsened their financial situation,” with nearly one in five saying the impact has made things “much worse.”⁹

Pressures were especially high for lower-income families, people with disabilities, and parents of children under 18, according to the study. 

These difficulties have translated into real-life tradeoffs. Almost one third of Americans (28%) report skipping or delaying medical care due to costs, while 45% say they’re avoiding major purchases, and 63% are turning to lower-cost substitutes.¹⁰

There are signs of perseverance, however. Discretionary spending on groceries, home goods, and apparel only dipped slightly year-over-year in 2024, according to Empower research. For many households, adapting to inflation doesn’t necessarily mean pulling back entirely: It means wise budgeting, smarter substitutions, and a keen focus on long-term financial stability. As inflation slows, households have more flexibility with how they spend and save.

Read more: 37% can’t afford an unexpected expense over $400, according to new Empower research

Savvier — not just smaller — spending

Empower data indicates Americans are pulling back in non-essential spending categories including clothing and home improvement in Q1 2025, a drop of roughly 22%. Consumers in 2025 spent less on some discretionary items year-over-year, with footwear dropping 22%. Thirty-seven percent of Empower survey participants said they plan to decrease their 2025 spending on apparel by 22%, and 35% plan to do so with footwear. 

There’s a duality at play: Daily life may be more expensive, but many of life’s little joys are still affordable enough to enjoy.

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Two stories, one direction

Despite some mixed economic signals, Americans are moving forward with a combination of resilience and persistence. Increasingly, small daily choices can move the needle for people, even if they don’t shift the numbers overnight. The Fed report indicates how households are steadily pushing through: Covering bills, managing income, and recalibrating budgets. 

Whether by dialing down expenses, increasing savings, or just making smarter choices, day-to-day household trends could show that slow and steady progress is possible — even as the long-term economic outlook remains uncertain. Even small actions, such as rounding up retirement account contributions or reviewing monthly statements, are helping people stay on course. Plus, many are still making purchases that bring them joy.

Just like the economy, personal finance isn’t linear. Growth has its zigzags, but it looks to be underway.