Summary

What happens to households with spending “spikes” that lack the income and cash reserves to support spending volatility?  This Issue Brief provides a unique analysis of 401(k) plan participants’ finances by linking 401(k) plan data with consumer banking data to better understand how 401(k) participants behave when faced with irregular expenses. Changes in credit card utilization, 401(k) plan contributions, and/or 401(k) plan loan use were examined after these participants experienced a significant spending spike.