National Survey: Two-Thirds of Middle-Income Families Believe They are Falling Behind the Cost of Living
Cooking at home overwhelmingly preferred (80%) to eating out
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Primerica Household Budget Index™ (HBI™) - Middle-income households experienced a slight increase in purchasing power as the HBI™ rose for the first time in 5 months — 100.3% in May, up from 100.1% in
This perception may be influencing individual financial habits with 80% of households reportedly cooking more meals at home instead of dining out or ordering takeout over the past year. The top two reasons for this shift in behavior were budget concerns, with 72% of respondents acknowledging this as a primary factor, followed by unreasonably high restaurant prices, which was a key factor for 62% of respondents.
“Middle-income families are continuing to make adjustments in their budgets in an attempt to manage the ongoing high cost of living,” said
This latest FSM™ survey coincides with the release of Primerica’s Household Budget Index™ (HBI™), which indicates middle-income households experienced a slight increase in purchasing power as the HBI™ rose for the first time in 5 months — 100.3% in May, up from 100.1% in
“It’s mildly encouraging that, after taking overall inflation into account, middle-income households saw an average real income gain of 1.3% over the past 12 months,” said
Key Findings from Primerica’s
- Reports of cutting costs or pausing savings altogether by middle-income families remained steady. During the first quarter, 46% of families reported they were scaling back with 48% reporting the same during the second quarter.
- The percentage of people cooking at home has increased. There is a major shift in spending and saving habits among middle-income families, including a staggering 4:1 ratio of families who report cooking meals at home compared to eating at restaurants or ordering takeout.
- Majority grasp financial basics but not complexities. Overall, two-thirds (65%) of households feel confident in making sound financial decisions without outside help, particularly when it comes to financial fundamentals like building good credit (87% confident), paying down credit card debt (83%) and creating and following a financial budget (74%).However, households continue to express less confidence when it comes to more complex financial matters, including setting up a retirement account such as a 401(k) or Individual Retirement Account (IRA) (66% confident), buying life insurance (63%), and investing in stocks (50%).
- Anxiety and limited time are the main drivers in lack of financial planning. More than a quarter (31%) say they don’t contribute to a savings account, follow a budget, contribute to an investment account or set a financial budget each month.Anxiety (29%) and not having time (19%) continue to be cited as the biggest challenges people have tracking their financial information.
Primerica Financial Security Monitor™ (FSM™) Topline Trends Data
|
Jun 2024 |
Mar 2024 |
Dec 2023 |
Sept 2023 |
Jun 2023 |
Mar 2023 |
Dec 2022 |
Sep 2022 |
Jun 2022 |
How would you rate the condition of your personal finances? Share reporting “Excellent” or “good.” |
49% |
50% |
50% |
49% |
50% |
52% |
53% |
53% |
54% |
Analysis:Respondents remain split on their assessment of their personal finances. |
|||||||||
Overall, would you say your income is…? Share reporting “Falling behind the cost of living” |
66% |
67% |
68% |
72% |
71% |
72% |
72% |
75% |
75% |
Share reporting “Stayed about even with the cost of living” |
26% |
25% |
24% |
20% |
22% |
21% |
20% |
19% |
20% |
Analysis: Concern about meeting the increased cost of living remained steady with two-thirds reporting they are falling behind the cost of living. |
|||||||||
And in the next year, do you think the American economy will be…? Share reporting “Worse off than it is now” |
40% |
46% |
53% |
56% |
57% |
53% |
56% |
51% |
61% |
Share reporting “Uncertain” |
19% |
18% |
9% |
9% |
9% |
7% |
8% |
8% |
8% |
Analysis: Fewer respondents think the economy will get worse over the next year, while more are uncertain about the direction of the economy. |
|||||||||
Do you have an emergency fund that would cover an expense of |
63% |
62% |
60% |
62% |
61% |
58% |
59% |
60% |
61% |
Analysis: The percentage of Americans who have an emergency fund that would cover an expense of |
|||||||||
How would you rate the economic health of your community? (Reporting “Not so good” and “Poor” responses.) |
58% |
60% |
57% |
55% |
54% |
59% |
53% |
55% |
58% |
Analysis: Respondents’ rating of the economic health of their communities has gotten slightly worse over the past year. |
|||||||||
How would you rate your ability to save for the future? (Reporting “Not so good” and “Poor” responses.) |
68% |
67% |
73% |
71% |
71% |
73% |
74% |
73% |
72% |
Analysis: Though slightly improving, a significant majority continue to feel it is difficult to save for the future. |
|||||||||
In the past three months, has your credit card debt…? (Reporting “Increased” responses.) |
30% |
34% |
35% |
34% |
33% |
33% |
39% |
37% |
29% |
Analysis: Credit card debt has fallen slightly over the past year. |
About Primerica’s Middle-Income Financial Security Monitor™ (FSM™)
Since
About the Primerica Household Budget Index™ (HBI™)
The Primerica Household Budget Index™ (HBI™) is constructed monthly on behalf of Primerica by its chief economic consultant
The HBI™ is presented as a percentage. If the index is above 100%, the purchasing power of middle-income families is stronger than in the baseline period and they may have extra money left over at the end of the month that can be applied to things like entertainment, extra savings, or debt reduction. If it is under 100%, households may have to reduce overall spending to levels below budget, reduce their savings or increase debt to cover expenses. The HBI™ uses
Periodically, prior HBI™ values may be revised due to revisions in the CPI series and
About
View source version on businesswire.com: https://www.businesswire.com/news/home/20240626551113/en/
Public Relations
gana.ahn@primerica.com
Investor Relations
nicole.russell@primerica.com
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