Americans are heading into 2026 with a dark cloud over their financial expectations. A new survey from Bankrate reveals that 32% of respondents believe their personal finances will get worse next year—the highest level of pessimism since the company began asking the question in 2018.
The findings represent a sharp reversal from just 12 months ago, when only 23% expected their financial situation to deteriorate. The nine-percentage-point jump marks one of the largest year-over-year swings in the survey's history.
Inflation Fatigue Drives the Gloom
When asked why they expected their finances to worsen, respondents pointed overwhelmingly to one culprit: prices. Seventy-eight percent cited continued high inflation as a primary concern, despite headline inflation moderating to around 2.7% annually.
The disconnect highlights a reality that economists have been grappling with for months: even as the rate of price increases slows, the cumulative damage to household budgets remains deeply felt. Prices have climbed roughly 25% since 2020, and many Americans simply haven't seen their incomes keep pace.
"What the inflation rate tells you is how fast prices are rising. What it doesn't tell you is how much pain people have already absorbed. That 25% cumulative increase doesn't disappear when CPI drops to 2.7%."
— Mark Hamrick, Senior Economic Analyst, Bankrate
Political Uncertainty Compounds Economic Anxiety
Beyond inflation, 55% of pessimistic respondents pointed to "work done by elected representatives" as a source of concern. The finding suggests that political turbulence—from tax policy debates to regulatory uncertainty—is weighing on household financial confidence.
Notably, the rise in pessimism crossed party lines. Among Republicans, the share expecting financial improvement dropped to 44% from 62% a year earlier—an 18-point plunge. Democrats weren't immune either, with 37% now expecting their finances to worsen, up from 30% in the previous survey.
The Generational Divide
Younger Americans remain the most hopeful about their financial futures, though even their optimism has dimmed:
- Gen Z: 46% expect improvement (still the most optimistic)
- Millennials: 40% expect improvement
- Gen X: 31% expect improvement
- Baby Boomers: 25% expect improvement (most pessimistic)
The generational pattern makes intuitive sense. Younger workers have more earning years ahead and often haven't yet locked in mortgages or other major expenses. Boomers, many of whom are retired or approaching retirement, have less flexibility to adjust to rising costs.
What Americans Plan to Do About It
Despite the gloom, the survey found that Americans aren't throwing in the towel. When asked about their top financial priority for 2026:
- 19% said paying down debt—the most common response
- 14% prioritized getting a higher-paying job or additional income source
- 13% focused on building emergency savings
- 12% emphasized budgeting and spending discipline
The emphasis on debt reduction aligns with broader concerns about record credit card balances and the resumption of student loan collections in 2026.
The Optimism Gap
Perhaps the most striking finding is the collapse of outright optimism. Just 34% of Americans expect their financial situation to improve next year, down sharply from 44% a year ago. Another 34% expect things to stay roughly the same.
For the first time since Bankrate began tracking this metric, pessimists essentially match optimists in number—a psychological shift that could influence everything from consumer spending to investment decisions in the year ahead.
Financial advisors caution against letting sentiment drive behavior. "How you feel about your finances and the reality of your finances aren't always the same thing," noted one wealth manager who reviewed the data. "The best response to uncertainty is building a plan, not assuming the worst."
Still, the survey paints a portrait of an American public that, despite a reasonably strong economy by most measures, feels increasingly anxious about what comes next.
