Over the past few weeks, we’ve highlighted several reports that Americans are growing increasingly uneasy about their financial future.

A recent Gallup survey found that affordability remains the nation’s top financial concern for the fifth year in a row, while a separate study from TIAA Institute showed financial literacy falling to an all-time low. In addition, reports show that more Americans are “unretiring” to keep up with rising living costs, and the latest data from the Federal Reserve confirms that households say their financial situation is deteriorating.

That shift — which has grown since the start of the year — is now reaching levels not seen since the height of the pandemic. According to the Fed’s latest Survey of Consumer Expectations, the share of households that say their financial situation is “much worse” than it was a year ago climbed to 13.3% in May, the highest reading since July 2022. Another 43.7% said their finances are somewhat worse than a year ago — the highest since January 2023.

Perhaps more concerning is what households expect next. More than one-third of respondents believe their financial situation will worsen over the coming year, while fewer than one-quarter expect improvement.

The gap between optimism and pessimism is now the widest it has been since 2022. What’s notable is that inflation expectations have remained stable too. Consumers are not suddenly forecasting a new inflation spike; instead, many appear to be reacting to the cumulative effect of several years of elevated prices, higher borrowing costs, and ongoing economic uncertainty. Even if inflation is no longer accelerating, many households still feel as though they’re falling behind.

The behavioral implications are worth watching. When people feel financially stressed, they often become more conservative with spending, delay major purchases, increase savings, or focus more heavily on short-term concerns. Those shifts can occur even when employment remains strong and investment portfolios have recovered. Meanwhile, younger households continue to face high housing costs and affordability challenges, while retirees and near-retirees are more sensitive to rising everyday expenses. In both cases, perception can influence decision-making just as much as reality.

For advisors, perhaps the most important takeaway is not any single survey result but the broader pattern emerging across multiple studies. Affordability concerns remain elevated, financial literacy is declining and more retirees are returning to work. And now, households are expressing the most negative views of their finances in nearly four years.

Viewed together, these trends suggest that many clients may be carrying more financial stress than their balance sheets alone would indicate. Advisors who recognize that disconnect may be better positioned to address concerns before they become problems, helping clients separate short-term anxiety from long-term financial reality. In an environment where confidence is weakening, giving reassurance and perspective is one of the most valuable services advisors can provide.

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