It’s difficult to describe the U.S. economy in black and white terms like “good” or “bad.” On several fronts, the data says the economy is healthy. But surveys show American consumers don’t feel that way.

“There’s no doubt right now that different data can show slightly different narratives,” says Heather Long, chief economist at Navy Federal Credit Union.

Depending on which measure you look at, inflation is falling or staying flat in recent months, Long points out. The consumer price index has dropped from its 9% peak in June 2022 and hovered around 3% since June 2023, according to U.S. Bureau of Labor Statistics data. Personal consumption expenditures has remained relatively flat for the last year, coming in at 2.9% in December 2025, the latest reading from the Bureau of Economic Analysis.

But prices for many consumer goods remain far above what they were in 2020, and wages have roughly plateaued over that time when adjusted for inflation, according to nonpartisan economic research group, The Hamilton Project. That disparity could be contributing to Americans feeling bad about the economy. Consumer sentiment is down nearly 13% year-over-year as of February, according to the University of Michigan Survey of Consumers, which is released monthly.

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Many economists referenced the U.S. economy as “K-shaped” in 2025, illustrating how higher earners were doing alright — continuing to spend and driving economic growth — while lower-income Americans pulled back.

Long, who was among the economists using the phrase “K-shaped,” says the economy is taking more of an “E-shape” in 2026, with three tiers of consumer behavior instead of two. A middle group is distinguishing itself, and those people’s behavior is starting to show that they’re experiencing growing signs of strain, she says.

Here’s what she’s seeing.

Like the top of the K-shape, the top tier of the E-shaped economy is comprised of high earners — the consumers who continue to spend money despite elevated prices. The top 20% of earners account for nearly 60% of all U.S. consumer spending, a recent analysis from Moody’s Analytics found.

“This top tier [of earners] that’s doing really well, that’s driving a lot of the consumption,” Long says.

The difference between the K-shape and the E-shape: Middle-earners’ spending growth was closely aligned with higher-earners until it started diverging toward the end of 2025, according to Bank of America Institute data released in February. As of January, the gap between high-income households and all other households’ annual spending growth reached its highest level since mid-2022, the bank reported.

Wealthy consumers aren’t just continuing to buy what they always have, despite higher prices. Some retailers and brands, especially in the food and hospitality industries, are increasingly boosting their premium offerings to attract those big spenders, Long says.

Premium credit cards like the Chase Sapphire Reserve and AmEx Platinum recently upped their annual fees to $795 and $895, respectively, betting that additional perks will lure in more high-earning cardholders. “Look at all of these exclusive platinum credit cards,” Long says. “Almost every company is trying to move up the value chain, and you can see that in the earnings calls.”

The strategy has paid off for the airlines, hotel brands, and food and beverage companies that have reported strong demand for their extant and newer premium offerings since fall 2025 — even as sales for their standard and discount products slow down.

Spending behaviors among middle class Americans is where you start to see signs of the affordability crisis, Long says. They’re still spending on their necessities and some discretionary categories, but “the middle class is treading water so they can still pay their bills,” she says.

Long calls this tier the “Costco economy,” referencing consumers who aren’t necessarily in a full-blown panic yet, but are increasingly shopping at discount and wholesale retailers like Costco and Walmart to get the most bang for their buck. 

“They’re obviously spending in a nervous way,” she says, “They feel they need to stretch every dollar they feel they need to buy in bulk, to do whatever they can [to save].”

Regardless of where they’re shopping, a growing number of American households are living paycheck to paycheck. Nearly 24% of households had expenses eating up the bulk of their earnings in 2025, according to data from Bank of America Institute published on Nov. 10. The bank’s report defines “paycheck to paycheck” as having costs for essentials like housing, groceries, utilities, gas, child care and more that exceed 95% of income.

The share of paycheck-to-paycheck households has been on the rise since at least 2023, the bank’s researchers found.

Middle-class households may be getting by for now, but Long says they’re experiencing stress in waves. “Not only are they facing high prices, but it’s every couple of months, something else surges,” she says. Eggs, for example aren’t nearly as expensive in 2026 as they were in 2025, but in January, beef prices were up 22% from the previous year, per the Labor Department.

“It’s just whack-a-mole inflation,” says Long.

The bottom tier of the E-shaped economy is characterized by high credit card usage and Buy Now, Pay Later usage, Long says.

While middle and higher-earners certainly use credit cards and sometimes carry balances on them, lower-earners are more likely to report carrying a balance. Among card holders, 59% of those earning between $25,000 and $49,999 say they’ve carried a balance from month to month at least once in the last year, according to the Federal Reserve’s latest Survey of Consumer Finances which was conducted in October 2024 and released in May 2025.

Half of cardholders earning between $50,000 and  $99,999 say they’ve carried a balance at least once in the last year, compared to just 38% of those earning $100,000 or more.

As for Buy Now, Pay Later plans, adults earning between $25,000 and $49,999 are mostly likely to have used the installment loans in the last year, the Fed reports. Lower earners, households earning less than $25,000, were the most likely survey respondents to report being paying late on a Buy Now, Pay Later plan, data shows.

A quarter of Buy Now, Pay Later users reported using the loans to pay for groceries in 2025, up from 14% in 2024, found a February 2025 LendingTree survey.

The 2026 tax season may come as a lifeline for Americans in the middle and bottom tiers, Long says. Over a third — 35% — of Americans expecting a tax refund say they’ll use at least a portion of it to pay down debt, a Feb. 23 Intuit TurboTax survey found. But even large refunds are only a temporary fix for an ongoing affordability problem, Long says.

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In high-performance environments, mental resilience is a competitive advantage. 

In my work as a neuroscientist, as the parent of two young children, and in my athletic endeavors — ballet, yoga, five triathlons and two half-marathons and counting — this is something that I constantly think about. 

All of these experiences have taught me that I can’t simply grind my way into a sharp mind. But I can build it by returning to the same simple practices, day after day.

Here’s what that looks like in my daily routine.

Unstructured time is one of the most underrated contributors to mental sharpness. It’s hard to prioritize when you have a full schedule, but it’s essential. 

Every day, I try to schedule “white space,” intentionally blocking my calendar from meetings or defined objectives. I’ll go outside and just sit, noticing the sounds around me and, if it’s a typical day in my Los Angeles neighborhood, feeling the sun on my skin. I often bring a notebook to jot down ideas or questions that come to mind. 

I may also do a few stretches or practice some breathing exercises. Generally, this pause allows me to check in with myself and helps restore my energy.

When I was young, I was an avid pianist and jigsaw puzzler. Now that my eldest kid is interested in both, I have been inspired to reintroduce these activities into my daily routine.

I genuinely love these hobbies, especially because they allow me to bond with my son. They also have a ton of cognitive benefits.

Learning a musical instrument strengthens brain regions that are involved with memory and executive function. It can also improve motor coordination and auditory processing. 

Working on puzzles is not only relaxing, but it can boost spatial reasoning as well.

If you want to perform at a high level, you have to pay attention to the transitional moments in your day, especially when you are shifting into and out of work mode. The in-between moments matter more than most people realize. 

When I get home from dropping off my boys at school, I often feel the pressure to immediately begin a work task. But when I pause for a short pre-work ritual — three minutes of journaling, a cup of tea, and a few deep breaths — I start with greater presence and focus. 

When it’s time to shift back into mom mode, I resist working until the last possible minute. Instead, I jot down the first task for my next work session. Before I leave my home office, I’ll take a few deep breaths to center myself and, on each exhale, release any lingering work thoughts.

Clear transitions can reduce mental residue and enhance cognitive efficiency.

These two disciplines form the foundation of my routine. I don’t have a perfect record, but when I skip either of them, my focus drifts, fatigue creeps in, and my stress is harder to manage. 

Exercise benefits cognitive function. It increases information processing speed and enhances learning and memory.

So, I prioritize at least 30 minutes of movement per day. I like to mix it up with my Peloton bike, my Peloton Tread, a self-guided or teacher-led yoga class, or strength training. When I have more time, I’ll head out for a beach run or a hike with the family.

I generally meditate in silence for 20 to 30 minutes every morning before my family wakes up.

Every day, I set a timer for five to 10 minutes to write. I’m old school and I like to put pen to paper. It is my go-to method to free up mental real estate and jump-start my creativity. 

When thoughts stay trapped in your head, whether they’re unfinished tasks, worries, or ideas, they consume valuable attentional resources. 

Writing those unruly thoughts down can reduce cognitive load, essentially the information that our working memory can hold and process at any given time. 

Alternate nostril breathing is a well-researched technique that can reduce mental fatigue and increase alertness. I do this whenever I feel my mental performance start to dip. Here’s how:

1. Use your right thumb to open and close your right nostril and your right ring finger to open and close your left nostril. 
2. Inhale through both open nostrils, then close your right nostril and exhale through your left nostril.
3. Inhale one more time through your left nostril and close it. Then open your right nostril, and exhale through your right nostril.
4. Repeat for a few minutes.

None of these practices are complicated, and I don’t need to execute them perfectly. I just want to be consistent. To become mentally sharp, you don’t need to be operating at high-intensity optimization all the time. You will burn out that way. 

Instead, build your mental resilience through small, repeatable habits that support the brain over time.

Daya Grant Ph.D., CMPC is a certified mental performance consultant, neuroscientist, and yoga/meditation teacher, who helps athletes and high performers train their mind for elevated performance. Daya has a private practice in Los Angeles and consults with athletes in a wide range of sports from youth to professional, as well as business leaders, doctors, and musicians. Daya lives in Los Angeles with her husband and their two young sons.

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Rosalyn Engelman was just 15 when she met her future husband, Irwin, she says. That was in 1953.

The two were set up by a mutual friend, and when Irwin, then 19, came to pick her up at her family’s home in the Bronx, “I certainly had not dated anyone like the tall, dark, handsome man in a navy-blue suit with a briefcase who came to my door,” she says.

“He looked like a movie star.” Irwin took her out for a movie and milkshake, and by the end of the night, they were falling in love, she says. After three years of dating, the two got married in November 1956.

In their nearly 70 years together, they had two daughters, stood side by side through life-threatening illnesses, traveled the world, and built their careers. Irwin worked as a CFO at companies like Xerox, and Engelman was a painter and mixed media artist whose work has been displayed all over the world, she says.

They now live at the Apsley, an assisted living facility in Manhattan.

For couples seeking tips on how to stay happily together for decades, here’s Engelman’s advice.

For Engelman, it really comes down to one piece of advice: “Try to understand the other person,” she says.

That can come into play in many ways.

If your spouse sometimes prioritizes their work, for example, put yourself in their shoes. “I never resented his time that he worked hard,” she says, “and I don’t think he resented the fact that I was covered in paint.”

Try to get interested in their hobbies as well. “He liked opera more, I learned to like opera,” she says. “I like classical music most, he learned to love classical music.”

Finally, understanding each other can also mean forgiving each other during mishaps, large or small. Engelman remembers the first time she tried to cook the two of them dinner. She decided on Brussels sprouts, hot dogs, and corn. And the dinner did not come out as she planned. The Brussels sprouts tasted like rubber, she says.

Irwin was not angry. Instead, “we just started laughing and went out for pizza,” she says. That’s the kind of mutual understanding that can keep a relationship strong.

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When Yeli Heidecker and her husband, Benjamin, both 32, decided they were going to downsize to a barndominium — a building designed to look like a barn, but with a traditional living space inside — they started looking for the perfect lot.

In early 2024, the couple purchased a two-acre lot in west-central Texas for $45,000 and began construction on the barndominium. Around the same time, they convinced Yeli’s mom, Liliana Villanueva, to move down and live in an RV on the property.

Yeli says Villanueva was experiencing some health issues at the time. And because she is a stay-at-home mom and content creator, Yeli says it would be easy to be around to help her mom. Plus, the idea of having her kids’ grandmother close by sounded amazing, she adds.

But shortly after the couple moved into the barndominium in late 2025, they began considering a more permanent living arrangement for Villanueva, Yeli says.

“We were afraid she was gonna trip and fall and hurt herself or something. We had the bright idea to do a tiny barndo like ours, but we’ll do it ourselves,” Yeli tells CNBC Make It.

Before taking the DIY route, the Heideckers obtained quotes for a small barndominium measuring about 400 square feet. The quotes ranged from $63,000 to $93,000, so they decided the best option was to do it themselves and stick to a $30,000 budget.

On top of that, Yeli and Benjamin decided to surprise Villanueva by building the tiny home while she was in Mexico visiting family for six weeks.

“I’m not going to sugarcoat it, it was chaotic,” Yeli says. “It was definitely hard, but at the same time, it was so incredibly fulfilling and amazing to see all the work we did.”

The couple hired contractors to handle the shell, electrical work and concrete flooring for the barndominium. The rest of the work, including installing the kitchen, painting the house and putting up the walls and drywall, was done mostly by Benjamin, Yeli says, but she helped out when she wasn’t taking care of their four young children.

“It was special because we built this for Abuela,” Yeli says, using the word for grandmother in Spanish. “It was emotional seeing it finished because of all the memories of my husband and I working on it. It feels like it bonded us on a deeper level.”

When Villanueva returned to Texas in November 2025, she moved into the tiny home even though it wasn’t fully finished.

“It was the most beautiful surprise I could have found after getting back from my trip. I am very happy with it,” Villanueva tells CNBC Make It. “I laugh because the house is small, but I have absolutely everything I need. It’s perfect. I love that I’m close to my daughter and my grandchildren. I feel protected and feel safe.”

“As immigrants, when you come here, you’re fighting the American Dream, and while she’s never owned a home on paper, just seeing her have that for herself was very emotional,” Yeli adds.

The one-bedroom, one-bathroom tiny home fits a washer and dryer as well as a full-size oven, stove and refrigerator. The Heideckers created the layout of the home with Villanueva’s specific needs in mind.

As of January, the only remaining task is tiling the bathroom, which Yeli says will happen soon.

Here’s a breakdown of the major expenses for the tiny home, according to documents reviewed by CNBC Make It. All expenses are rounded.

• Trim: $250
• Paint: $350
• Flooring: $600
• AC mini split: $750
• Cabinets: $1,300
• Plumbing: $1,500
• Drywall and lumber: $1,700
• Electricity: $1,775
• Appliances: $2,000
• Insulation: $2,100
• Miscellaneous: $6,500
• Barn shell: $12,500

In total, the home cost $31,325, including a number of miscellaneous expenses, such as power tools, countertops, lighting and faucets.

Because the tiny home is on the same property as the Heideckers’, it doesn’t have separate utility bills. Instead, the couple covers all monthly expenses, such as water, electricity and gas, while Villanueva pays about $100 a month for cable TV.

Since Villanueva moved in, Yeli says the only thing the couple regrets is not making the tiny home a little bigger, specifically in the bedroom. But for the mother and daughter, the best part is being able to live next to each other.

“It’s nice to see my kids being able to have Grandma just there, especially after we lived away from family for a very long time,” Yeli says.

Although the tiny home isn’t officially finished, Yeli and Villanueva say the barndominium and tiny home are their forever homes, respectively.

“I’m doing very well here and have no plans on ever leaving,” Villanueva says. “I have it very good here and get to enjoy it alongside my family.”

Despite how chaotic the process was for the couple to get the tiny house done in such a short amount of time, Yeli says she would do it all over again — and recommends it to others, too.

“It’s definitely worth it if you have aging parents, but even if you don’t have an aging parent, having a special unit for someone, or when you have family coming over, or something like that, it’s nice,” Yeli says.

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If you don’t make boosting your child’s self-esteem “one of your top priorities” as a parent, you could jeopardize their future success and happiness, says mental performance coach Cindra Kamphoff.

“Parents need to be more aware of the confidence crisis in America today, and they need to be really deliberate about increasing the confidence of their kids,” says Kamphoff, the founder of the Mentally Strong Institute, a mental coaching firm for business leaders and athletes.

Nearly half of all Gen Z workers in the U.S. struggle with inadequate confidence, including negative self-comparisons to those around them, says Kamphoff, citing a survey of 750 subjects in The 2025 National Research Study on Confidence, which she co-authored. Other studies have had similar findings, including that under 60% of U.S. teens feel they generally get enough emotional support, according to a 2024 report from the U.S. Centers for Disease Control and Prevention.

Nurturing confidence in your kids helps them develop the independence and resilience they’ll need to overcome life’s challenges, learn from inevitable setbacks and continue taking necessary risks — all of which are key traits in happy, successful adults, research shows.

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“When kids are more confident, they’re less likely to second guess themselves [or] hold their opinions back,” says Kamphoff, who has a Ph.D. in sports and exercise psychology, and has worked as a mental coach with the NFL’s Minnesota Vikings and the U.S. Olympic Track and Field team.

“You’re setting them up for a lifetime of success when you’re deliberate about [improving confidence],” she adds.

The work of building long-lasting confidence in your children starts early in their childhood and can last well into their adulthood, says Kamphoff. And harsh criticism from parents often forms the basis of a person’s negative inner critic for years to come, research shows.

She recommends two specific strategies that parents should embrace to help nurture their child’s confidence, no matter their age.

1. Help your child recognize, and regulate, their ‘inner critic’

The majority of American workers struggle with a harsh inner critic, Kamphoff says — a negative internal voice that may doubt the decisions you make, potentially stifling your productivity or motivation.

“That voice starts when you’re really young,” Kamphoff says. It’s an evolutionary mechanism that elevates supposed problems to the forefront of your consciousness so they can be addressed directly, but when you’re not actually in danger, that constant self-criticism can cause undue stress, research shows.

Parents should “teach kids how to notice their negative self-talk and replace it with the truth,” Kamphoff recommends. She uses a tool that she calls “the Truth Meter,” a series of three quick questions:

1. Is that true?
2. Is that thought serving you?
3. What would be a more empowering thought you could choose right now?

The line of self-questioning is effective because our harshest self-talk is often untrue — or a distorted version of the truth — and worrying about it won’t serve you positively, she says. Shifting your child’s focus to something more accurate and productive should help them pull themselves out of a vicious cycle.

You can use those three questions for yourself, too — particularly because parents should generally try to model positive behavior for their kids, says Kamphoff. “As parents, you can teach your kids how to manage that inner voice [and] be a good role model,” she says.

2. ‘Normalize failure’

Children typically lose some amount of confidence after setbacks or negative interactions, like social rejection from a peer or struggling to learn a new skill, says Kamphoff.

“Most people, when they fail they really beat themselves up,” she says. Teaching kids that “there’s no such thing as failure,” because every setback is an opportunity to learn something new and improve your skills or approach, can be a “really powerful” tool to embrace.

As a mental coach to professional athletes, Kamphoff regularly teaches the concept of moving on from past failures, she says. In those cases, she turns to another three-step tool that she calls “Learn-Burn-Return” to help people move on from failures, rather than dwelling on them.

The first step calls for identifying lessons to learn from a specific mistake or failure, to avoid repeating it in the future. Parents can ask their child, “What would you do differently next time?” and remind them that “you are not the mistake,” says Kamphoff: Every failure is a temporary setback, and not something that must define them permanently.

The second step is moving on from the mistake. Kamphoff recommends teaching your child an easily repeatable phrase or action, like physically “shaking it off,” to signal that it’s time to leave that negative experience in the past.

In the third step, parents teach kids to “return” to a more positive mindset by employing “confident self-talk and body language,” like reminding them of their strengths and how the lessons from their setbacks can help them grow going forward, she says.

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