Survey: How and Why Consumers Budget

Managing one’s finances is not a simple task. Personal finance management (i.e., budgeting, investing, etc.) is not taught as a part of standard curriculum across the United States, requiring consumers to learn from online and social resources. Maintaining a budget is a key aspect of personal finance management (PFM) but may seem overwhelming or unnecessary to many consumers. Banks have an opportunity to better support consumers with budgeting and spending analysis tools and resources on their banking sites and apps, especially after the end of popular budgeting app Mint in 2023. To better understand consumer behaviors regarding personal finance management, CI conducted a survey of consumers in September 2024 about their budget habits. We found the following, explained in detail below:

• • Firms can support consumers with mobile-focused PFM resources
  • Consumers respond to financial stress by cutting costs
  • People who do not budget are less motivated and confident in planning for their financial future
  • Budgeting helps people feel confident and hold themselves accountable to their financial goals

Firms can support consumers with mobile-focused PFM resources

A vast majority of survey respondents mark the mobile app as their primary platform (73%), signaling the importance of ensuring the platform supports PFM. We found that 62% consumers in the survey have created a budget with around 48% regularly maintaining a budget and 15% sometimes maintaining a budget. Essentially, most people budget with some frequency but there is a large segment of consumers who have never made a budget before. The consumers who have not budgeted before may not know where to begin or recognize the value of creating a financial plan regardless of income.

The world has an abundance of financial planning resources, particularly with the advance of technology and social media. Across all generations, internet searches are among the most popular resources with 38% of respondents selecting the resource. However, we found that generations differ when it comes to the other resources that they seek out to learn about personal finances. Boomers focus on a select few resources for personal finance information, whereas Gen Z pulls information from a variety of sources, especially social ones including parents, other family, friends and social media.

Consumers respond to financial stress by cutting costs

Respondents generally align in how they address financial stress and typically try to cut costs (70%). However, we saw differences in behavior between those who maintain a budget and those who do not. Firms can leverage this to support consumers with different planning habits.

Unsurprisingly, a larger portion of consumers in the survey who currently maintain a budget are likely to create a spending plan (44%) and consult a financial planning expert (17%), nearly twice the percentage of those who do not maintain a budget and would do the same. Firms can thus facilitate access to a personal finance expert, especially in PFM tools, to better support those who maintain budgets in feeling less stressed about their personal finances.

A slightly larger share of those who do not budget try to supplement their income or find other employment when they are stressed about their finances (30%). Notably, nearly double the percentage of individuals who do not budget will simply ignore the problem (11%) compared to those who do budget (6%). The discrepancies between individuals who do and do not budget signal that those who do not may benefit from additional education and support when stressed about their finances.

People who do not budget are less motivated and confident in planning for their financial future

According to the survey, the primary reason that consumers do not budget is because they feel they do not make enough money to need to budget. However, we see trends emerge between users with different levels of financial stress. It is important for firms to understand these differences to be able to better position PFM features and resources.

Similarly, the largest portion of those with moderate amount of stress about finances feel they do not know how to budget (42%). Firms can support users with higher financial stress by demonstrating the value of budgeting, even for those with low or sporadic income, and providing additional support in maintaining a budget consistently.

Individuals with low financial stress generally say they have enough disposable income to not need to budget (71%) either not seeing a need to (58%) or finding budgeting too time consuming (50%). However, financial planning, particularly for long term goals, is still important regardless of income. Users with lower financial stress thus may benefit from goal tools or other experiences that help them to prepare for their financial futures at a high level.

We also asked respondents their level of agreement with a set of statements related to financial planning. More consumers who budget “somewhat agree” or “strongly agree” with feeling motivated to learn about personal finances and plan for their financial futures. The largest segment of those who do not budget agree that they feel confident planning for short-term financial goals (50%). This confidence dips about 10-ppt for long-term goals regardless of whether someone budgets. About a third of respondents who do not budget feel knowledgeable about the steps needed to plan for their futures and seek out opportunities to learn about it.

Banks can help to educate consumers on the benefits of budgeting and encourage continued efforts to maintain a budget. Whether it be through email messaging or online resources, banks can appeal to consumers—especially younger generations—with a wealth of financial planning support options. Even those who continually choose not to budget can benefit from learning about financial concepts to better prepare for their financial futures, including retirement and other long-term goals.

Budgeting helps people feel confident and hold themselves accountable to their financial goals

The most common reasons that people budget include is to hold themselves accountable (64%) and to know where their money is going (63%). However, we see differences among generational lines. For example, twice the amount of Boomers (62%) budget to adjust their spending in comparison to Gen Z (29%). The generational difference may be due to where older generations are in their financial journey and have more flexibility with spending and saving habits.

Conversely, over three times the amount of Millennials (30%) and Gen Z (21%) budget to keep track of more than one person compared to Boomers (6%); lifestyles and financial journeys may account for the generational differences with younger people more likely to have roommates, new partners or young dependents who require additional planning. Younger generations also are more likely to cite wanting to analyze their spending over time, suggesting they may benefit more from functions available in modern bank spending analysis tools including spending data visualizations and trends. Overall, banks need to consider how to support users in different stages of life and address their financial planning needs to encourage engagement.

Notably, most people who budget do so via pen and paper (58%), though this is skewed by older generations such as Boomers who largely prefer this mode (77%). Gen Z, on the other hand, vastly favors digital budgeting apps with 60% of respondents selecting the option compared to just 2% of Boomers. A mostly even spread of generations opt to use spreadsheets, a tool that banks can draw inspiration from to provide a convenient and familiar way to create and maintain a budget. While the least popular overall, just under 30% of Millennials note that they use their bank’s spending analysis/budgeting tool.

We asked individuals who use their bank’s spending analysis/budgeting tool what they like and dislike about the feature. The most consistent answer we saw when it came to likes was the availability of support for budgeting and general cash flow. One respondent said: “Their tools are user friendly, keep me organized in a way that makes sense to me and create a reference whenever I am unsure of where I am at with my budget.”

“Their tools are user friendly, keep me organized in a way that makes sense to me and create a reference whenever I am unsure of where I am at with my budget.”

Users cited how their bank already has their spending habits, making those habits easier to keep track of and see money going in and out. Other common responses highlighted how budgeting through a bank allowed users to save more money or spend less, as they were able to see their spending in conjunction with their savings accounts. Seeing spending and saving in this way makes it easier for users to be able to plan for their financial futures. Similarly, other consumers in the survey noted how easy and convenient the tools to create a budget are. Users felt that the tools are simple and update dynamically while providing access to financial advisors or technical support as needed.

Respondents had fewer negative things to say about their bank’s spending analysis/budgeting tool. The most common answers were that they do not dislike anything about the tool. However, small trends emerge with some consumers in the survey highlighting that the budget tool did not feel personalized or comprehensive enough for their needs. Other users disliked the results and suggestions (or lack thereof) with one noting: “It doesn’t offer enough suggestions on how to fix my budget.”

“It doesn’t offer enough suggestions on how to fix my budget.”

Therefore, banks can encourage engagement with their spending analysis tools by providing ample resources and education in digestible formats. It is important to avoid overwhelming users with information, especially as many may already be well-versed in financial literacy and require less support than other users. However, some will greatly benefit from instructional content throughout the budgeting process, including budget creation suggestions or analysis, to better understand how to plan for their financial goals. Banks would do well to understand how differences in behavior, lifestyle and financial situation impact a user’s ability and desire to plan for their financial future to better support users at different stages.

For more on the latest trends and best practices across financial services and healthcare, check out CI’s Insights section. And learn more about how our subscription research services and competitive benchmarking reports can help organizations offer a best-in-class digital experience.