Why parents with young children are reporting a dramatic drop-off in their financial well-being

Parents with young children in the U.S. have experienced a notable decline in their financial well-being, as reported by the Federal Reserve's annual Survey of Household Economics and Decisionmaking. The percentage of these parents feeling financially secure dropped from 69% in 2022 to 64% in 2023, marking the lowest level since 2015. This downturn is attributed to the end of pandemic-era financial aids like the expanded child tax credit and support for child care centers, which has led to increased expenses and financial strain for many families.

The Federal Reserve's annual comprehensive study, the Survey of Household Economics and Decisionmaking, revealed a decline in the financial well-being of parents with young children in 2023 compared to previous years4. The percentage of parents living with children under the age of 18 who felt financially secure dropped from 69% in 2022 to 64% in 2023. This figure is down from a record high of 75% in 2021 and represents the lowest on record since 2015, when the Fed began conducting the survey. The report suggests that the decline in financial sentiment could be attributed to the expiration of pandemic-era expanded child tax credits and the sunsetting of support for child care groups, leading to increased financial strain on families.