Insights from the latest BMO Real Financial Progress Index: Parents in the U.S. are feeling the pressure of juggling finances

While the latest BMO Real Financial Progress Index finds most Americans (79%) feel anxiety about their overall financial situation, parents with children at home under the age of 18 are more likely to feel overwhelmed by their financial responsibilities – 71% of parents, compared to just 54% of those without children at home. 

But despite the stress, parents say the experience is a positive one: 89% agree having children brings them unmatched joy and fulfillment, and 59% of Americans who are raising children under 18 feel they are making real financial progress, compared to 41% without children at home.   

“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. At BMO, we’re proud to support families of all kinds as they set goals, plan ahead and take action to achieve real financial progress.” 

– Paul Dilda
Head of U.S. Consumer Strategy, BMO 

Parents are taking financial action – and seeing progress 

Although parents with children at home are more likely to say they feel financially overwhelmed, they are also more likely to use proactive strategies to manage that stress. For example, 60% of parents set a yearly budget, compared to 37% of those without children at home. 

Other strategies employed include setting financial goals (83% vs. 74%), having a written financial plan (54% vs. 31%) and having a professional financial advisor (47% vs. 32%). 

How everyday costs, finances and social pressures shape parenthood 

Americans say the price of childcare is too high, with 83% agreeing the cost of raising kids has “gotten out of control” and 78% saying they often wonder how those around them can afford raising a family.  

With concerns about managing the financial aspects of parenthood so widespread, Americans report money is a major factor in their family decision-making. Nearly half (48%) of parents say financial stability was a top three factor influencing whether they had children. Potential financial strain is also weighing on the plans of those who do not yet have children: 55% of Americans who plan to raise children someday and 40% who are unsure if they will start a family say they are concerned about the negative impact on their financial security.  

One significant challenge for American parents is balancing the short and long-term financial priorities of raising a child: 84% of parents say everyday costs like daycare or school supplies negatively impact their ability to save for their child’s long-term future. Other financial hurdles and stressors widely affecting parents include: 

• Everyday sticker shock: Many American parents say everyday costs of raising children took them by surprise, including family groceries (38%), activities and entertainment like sports clubs and toys (36%) and the cost of daycare or afterschool care (32%).  

• Parental peer pressure: 77% of parents with children at home agree they feel pressure to keep up with other families by spending more than they should. The anxiety to keep up with those around them is most pronounced among younger parents, with 78% of Gen Z and 81% of Millennial parents saying they feel the pull to overspend, compared to 74% of Gen X and 68% of Boomer parents. 

• Financial doomscrolling: 80% of parents say the lifestyles of parenting influencers on social media fuels financial anxiety. Younger parents are more likely to report social media-induced stress: 80% of Gen Z and 83% of Millennial parents say parenting influencers fuel financial anxiety, compared to 74% and 67% of their Gen X and Boomer counterparts.  

Don’t forget about Fido 

A source of financial stress for both American families with and without children are their beloved dogs, cats and other pets.  

Americans overwhelmingly consider their pets family, with 81% of Americans, including non-pet owners, agreeing a dog or cat is a full member of a family. Like the cost of childcare, most Americans agree the cost of pet care has risen over recent years; in fact, 64% of Americans say the cost of taking care of a dog or cat is almost as high as having a child.  

Learn more about how BMO can help families and individuals make real financial progress.