Parents are facing heightened financial stress compared to their child-free peers, but they’re also proving to be more proactive and resilient when it comes to money management.
That’s according to the latest BMO Real Financial Progress Index, which found that that while almost eight in ten Americans feel some level of financial anxiety, parents with children under 18 at home report a heavier burden.
Seven in ten (71%) say they often feel overwhelmed, compared to just 54% of non-parents, but despite the stress, parents remain optimistic with 89% saying that raising children brings unmatched joy, and 59% believing they are making real financial progress, significantly higher than the 41% among those without kids.
“Parents today report feeling significant financial pressure, but they're also stepping up in powerful ways to take control of their family's financial plans,” said Paul Dilda, head of US Consumer Strategy at BMO.
Parents are far more likely than non-parents to budget annually (60% vs. 37%), set financial goals (83% vs. 74%), and have a professional financial advisor (47% vs. 32%).
However, everyday costs remain a major source of strain with 84% of parents saying that short-term expenses eat into their ability to save for long-term goals. Many (38%) report higher-than-expected grocery bills, 36% point to activities and entertainment, and 32% say childcare and afterschool costs weigh heavily.
More than three-quarters (77%) of parents admit they feel pushed to overspend to keep up with other families. That pressure is most acute among younger generations with 81% of Millennials and 78% of Gen Z parents saying they struggle with financial peer pressure. Social media amplifies the issue with 80% of parents saying that influencer portrayals of parenthood fuel anxiety.
Americans overwhelmingly view pets as family members and 64% believe caring for a cat or dog now rivals the costs of raising a child.
"No matter what your priorities are for your family, being intentional with your financial goals can help you feel more in control and avoid peer or social media pressure to overspend," Dilda said.
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