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A new report from the Primerica Household Budget Index suggests that a majority of middle-income Americans are worried about their finances. The main culprit of the middle class’ anxieties seems to be the cost of living. Despite a recent bump in purchasing power, a great number of respondents across most age demographics expressed pessimism about their ability to keep up with rising prices, real or perceived.
Indeed, a majority of respondents (65%) said that their incomes were not keeping up with the cost of living. This is the 14th straight quarter that 65% or more of respondents have responded as such. Fifty-one percent of respondents reported feeling stressed about the rising cost of living, respectfully.
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While 57% of respondents reported feeling stressed about money and finances, there were large differences across generations. Financial stress correlated with the frequency of big life events among age groups (financially speaking). Three quarters of millennials reported being stressed, compared to 62% of Gen Xers, 61% of Gen Zers, and just 39% of baby boomers.
Amy Cutts, an economist who consults for Primerica, chalked up millennials’ high anxiety to their unique experience. “Millennials are at peak ‘adulting’ ages, when they would typically buy homes, start families, etc., but the highest inflation and interest rates in their lifetimes coupled with the high costs of homes and cars and child care are limiting their options,” says Cutts.
Unfortunately, the middle class’ malaise seems to have seeped into future financial projections. Around 65% of the survey’s respondents said they’d be worse off or the same financially next year.
Cutts blames the negativity on pandemic and post-pandemic era inflation: “We are in a new paradigm of permanently higher prices that consumers have not yet adjusted to emotionally and, in some cases, financially, and where a person is in their life can impact that even further.”
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