How Households Navigate Financial Shortfalls: A Study of Financial Choices and Coping Behaviours

Client

A Global Financial Services Organization

Service

Consumer Financial Research / In-Depth Interviews

Sector

BFSI

Coverage

United States

A global financial services organization partnered with us for household financial shortfall research across the United States. The study focused on how consumers experience and respond to short-term gaps between income and expenses, from recurring monthly shortfalls to unexpected expenses and sudden income drops.

The research explored the decisions and coping behaviours that follow these gaps, including the role of traditional and non-traditional financial options, while identifying patterns that could help distinguish different financial personas.

The Challenge

The challenge was to understand how households manage financial shortfalls arising from different circumstances. While some consumers faced recurring gaps between income and regular expenses, others were affected by unexpected costs or sudden income drops. Each situation could lead to different decisions and coping behaviours.

Key areas of focus included:

• Recurring income-expense gaps and how households respond when regular incomerepeatedly falls short.

• How consumers manage unexpected expenses that cannot be absorbed within the same month.

• Behaviour following an income drop that makes regular expenses harder to meet.

• Financial decision making during income shortfalls, including the trade-offs made when immediate needs compete.

• The role of BNPL, payday loans, P2P services, check-cashing, money orders, and other non-traditional options.

• Differences in coping behaviour across income and age groups.

• Behavioural patterns that could distinguish one financial-gap persona from another.

The study therefore needed to go beyond identifying financial pressure and uncover what caused each gap, how households responded, and which behaviours consistently separated one financial persona from another.

What We Did

We designed a qualitative consumer financial shortfall research program using video IDIs across the United States. A short pre-interview survey captured each participant’s financial situation and recent experience with income-expense gaps, providing context for the one-on-one discussions.

The study included:

• 36 participants recruited to achieve 30 completed interviews.

• Equal representation across three age groups: 18–34, 35–54, and 55+.

• Household income quotas spanning below $50K, $50K–$100K, and above $100K.

• A balanced gender mix across the final sample.

• Full-time and part-time employed participants.

• Consumers experiencing recurring income-expense gaps, unexpected expenses, or income drops.

• Inclusion of consumers using BNPL, payday loans, P2P services, check-cashing, and money orders.

• 60-minute one-on-one video interviews conducted through Zoom.

• Client moderation focused on consumer financial behavior, coping strategies, financial trade-offs, and short-term decision-making.

Combining structured pre-work with in-depth interviews connected each financial gap with the decisions that followed, helping identify recurring patterns for distinct financial personas

The Impact of Research

The research gave the client a deeper understanding of how household responses differed across recurring income-expense gaps, unexpected costs, and sudden income drops. It also identified the coping behaviours that repeated across different household profiles.

Key outcomes included:

• Distinct behavioural patterns across recurring shortfalls, unexpected expenses, and income disruption.

• Financial trade-offs households make when regular income cannot cover immediate needs.

• Differences in coping behaviour across age groups and household income levels.

• The role of BNPL, payday loans, P2P services, check-cashing, and money orders during short-term gaps.

• Recurring coping patterns that could support financial personas based on household behavior.

• Behavioural differences that went beyond demographic and income characteristics.

• Areas where different financial-gap profiles may require different forms of support or engagement.

By connecting each financial gap with the decisions that followed, the research identified distinct patterns in how households respond to different financial pressures. Contact us to uncover the behaviours, needs, and market dynamics behind your next business question.