National Survey Reveals Financial Struggles Among Middle-Income Families Despite Slight Improvement in Purchasing Power
In a revealing snapshot of middle-income financial sentiment, Primerica, Inc. has unveiled its second-quarter Financial Security Monitor™ (FSM™) survey for 2024. The survey highlights a significant concern among middle-income families, with two-thirds expressing that they are falling behind the rising cost of living. Despite signs of a slowing inflation, the financial strain remains a pressing issue.
The Primerica Household Budget Index™ (HBI™) showed a modest increase in purchasing power for middle-income households, rising to 100.3% in May from 100.1% in April 2024. This is the first uptick in five months, suggesting a slight easing of financial pressures. However, the purchasing power is only marginally above the baseline established in January 2019, indicating that households are still struggling to regain financial stability.
A notable shift in consumer behavior is evident, with 80% of households opting to cook more meals at home rather than dining out or ordering takeout. The primary reasons cited for this change are budget constraints (72%) and high restaurant prices (62%). This trend underscores the ongoing adjustments families are making to manage their expenses amid economic challenges.
Glenn Williams, CEO of Primerica, highlighted the difficult choices families face, including increased credit card usage and reduced savings. These actions, while necessary in the short term, could have long-term negative effects on their financial health. The survey results show a persistent need for financial literacy and planning, especially as families navigate these economic uncertainties.
Economic consultant Amy Crews Cutts emphasized that while there has been a slight real income gain of 1.3% over the past year, the rising costs of necessities continue to outpace these gains. As gasoline prices have fallen, other essential goods have become more expensive, complicating the financial landscape for many households.
Key findings from the FSM™ survey indicate a steady pattern of financial cutbacks among middle-income families. Nearly half of the respondents reported scaling back or pausing their savings efforts in both the first and second quarters of 2024. Additionally, confidence in handling basic financial tasks remains high, with the majority feeling capable of managing credit and budgeting. However, confidence wanes when it comes to more complex financial activities like retirement planning and investing in stocks.
The FSM™ survey also reveals that a significant portion of respondents (31%) do not engage in regular financial planning activities due to anxiety and lack of time. This highlights the ongoing challenges individuals face in achieving financial security.
Primerica’s Household Budget Index™ provides a detailed measure of the purchasing power of middle-income families, factoring in the costs of necessities and earned income. Despite the slight improvement, the index underscores the continued financial strain on these households.
The FSM™ survey, conducted online from June 8-11, 2024, involved 1,017 adults with household incomes ranging from $30,000 to $130,000. The results offer a comprehensive view of the financial health and concerns of middle-income Americans, reflecting the broader economic trends and their impact on everyday life.
For more detailed information on the FSM™ and HBI™, visit Primerica’s official website.