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A large survey asked Americans about their finances. Here are some pain points
Rising prices continue to be a top concern for Americans, according to a new Federal Reserve survey. But 72% of adults say they live comfortably financially or are at least well off. (Frederic J. Brown/AFP via Getty Images)
The overwhelming majority of Americans say they are “at least financially well off,” but most remain concerned about rising prices, and 1 in 6 say they have bills they can’t pay, according to one study. report released Tuesday by the Federal Reserve.
Every year, the Fed surveys thousands of people about their household finances, including income, savings and expenses. This year’s outlook shows that household budgets have remained generally stable over the past year, but they are not as solid as they were two years ago, when pandemic relief payments helped boost people’s bank accounts and inflation. it was just starting to take hold.
The survey, conducted last fall, found that 72% of adults live comfortably financially or are at least well off. This represents a drop from 73% in 2022 and 78% in 2021.
Childcare is a significant expense
One group that saw a bigger drop in well-being was parents. Just 64% of people with children under 18 said they were at least well off – down from 75% in 2021. Childcare is a significant expense for many families, often costing at least half the price of their home. The average monthly cost for child care was $800, or $1,100 for those using more than 20 hours per week.
Around a third of respondents said their monthly income increased during the year, while a slightly higher percentage – 38% – said their monthly expenses increased.
2 in 3 Americans say inflation has made their finances worse
Although inflation is lower now than it was a year ago and less than half what it was in 2022, two-thirds of Americans say rising prices have made their financial situation worse, including 19% who say they are much worse off. About 1 in 3 people said inflation had little effect on family finances.
1 in 3 Americans were unable to cover a surprise $400 expense
Not surprisingly, families with lower incomes reported more financial difficulties, such as being unable to pay their bills each month or skipping meals or medical care. Overall, 48% of respondents said they had money left over after paying expenses, while 17% said they had unpaid bills in the previous month.
Faced with an unexpected expense of $400, 63% of respondents said they could cover it with savings. This remains unchanged from 2022, but is down slightly from 2021. About 1 in 8 people said they would not be able to afford such an expense at all.
Double-digit price increases in home insurance
This year’s report included a new question about home insurance, which saw double-digit price increases last year. While the vast majority of homeowners have insurance, some of the most vulnerable people do not, including more than 20% of low-income families in the South.
“This perspective continues to help the Federal Reserve better understand how families are coping with the current economic challenges they face,” Federal Reserve Board Governor Michelle Bowman said in a statement. declaration.
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