You can buy all the parenting books you want, but chances are you don’t realize how expensive kids can be till you have them. And while inflation is eating into the pockets of most Americans, rising prices are hitting American parents the hardest, with the situation being the most dire in almost a decade, according to a recent Federal Reserve survey.
What Happened: The percentage of parents with children under 18 who felt financially secure dropped from 69% in 2022 to 64% in 2023, the lowest level since data collection began in 2015, the New York Post reported. The overall percentage of U.S. households that reported their financial health as “OK” fell to 72% in 2023, the lowest since 2016.
Of the 11,000 adults surveyed in October 2023, 35% cited price hikes as their primary financial concern, up from 33% the previous year. Inflation peaked at 9% in June 2022 before gradually falling to just under 4% by the time of the survey. However, inflation has remained stubbornly high this year, prompting the Fed to postpone an anticipated cut to the 23-year-high interest rate.
According to a survey, 65% of respondents reported that rising prices had negatively impacted their financial situations. Meanwhile, only 34% noted an increase in their family’s monthly income over the past year. The survey also found that 38% of respondents had increased their spending over the last 12 months.
Why It Matters: The rising cost of living has led to a significant financial burden for American families. A study by the Urban Institute revealed that the increasing prices of groceries, a consequence of overall inflation, have pushed many families to use their savings, credit cards, buy now, pay later installment programs, or payday loans to cover their grocery bills in 2023. This trend is causing financial instability for many households.
Despite the slowing rate of price increases, households are still spending more on groceries than they did the previous year. This has led to many Americans resorting to debt to keep their kitchens stocked, causing financial instability for many households.
On the other hand, some experts see a silver lining in the inflation cloud. Peter Mallouk, President of Creative Planning, emphasized that the rising costs of everyday items, like a can of Diet Coke, will eventually be reflected in stock prices. Mallouk explained that contrary to popular beliefs, one should invest in the stock market during inflation instead of turning attention to asset classes like gold.
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image generated using artificial intelligence via Midjourney.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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