June 23, 2024

Image for article titled Parents are feeling more financial stress than other U.S. adults — and the gap is widening

Photo: ArtistGNDphotography (Getty Images)

A shrinking number of parents feel that they’re doing well financially — even as U.S. adults generally feel pretty good about about their finances.

The share of parents living with children under the age of 18 who said they’re doing at least okay financially dropped to 64% in 2023, from 69% a year earlier, according to the Federal Reserve’s latest Economic Well-Being of U.S. Households survey. That’s an 11 percentage point drop from 2021.

Parents are the one group among all U.S. adults that have seen “sizable swings in well-being,” according to the central bank. The group’s well-being fell sharply after the onset of the pandemic, saw a healthy rebound in 2021, and has plunged again since then.

Read more: Almost half of U.S. parents financially support their adult children

On the other hand, the overall share of adults who said they’re doing at least okay financially remained unchanged from 2022 at 72%. That’s still down 6 percentage points from the recent high of 78% in 2021, however.

Inflation was the most common financial challenge among all Americans, followed by basic living expenses and housing.

Much of the decline among parents’ financial well-being appears to have taken place between 2021 and 2022, the Fed said. For example, the share of parents who would be able to cover a $400 emergency expense exclusively using cash, savings, or a credit card paid off at the next statement reached a high of 64% in 2021, but dropped off to 57% in 2022. That share ticked down only slightly to 56% in 2023.

Parents also shoulder significant extra costs, particularly as inflation continues to bear down on Americans. About 4 in 10 single working parents of a younger child (under age 13) used paid childcare — and that share is about the same for parents living with a spouse where both parents work.

The median monthly amount that parents paid for childcare was $800. For parents who paid for 20 hours or more of childcare each week, the median cost rose to $1,100.

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