How Financially Resilient is the Middle Class in 2024?
How did Americans navigate their finances in 2024 and what are their biggest concerns for the future? This new index looks at how middle-class families are coping financially – let’s dive into the findings:
Key Takeaways from the Index
At the start of 2024, progress toward financial stability increased. Although cost pressures eased, families still struggled with high costs of housing and essential expenses. Yahoo Finance reported that nearly three in 10 middle-class households spent more than 30% of their income on housing.
Later in the year, the index showed financial resilience was still improving but it slowed down, primarily due to weakening wage growth. Still, the index reflected better circumstances, scoring significantly higher than the previous year suggesting that financial resilience still slowly improved.
What Middle-Class Families Are Saying
According to the Financial Resilience Survey, daily costs like groceries and bills are the top concern for 38% of households. In addition to daily expenses, healthcare expenses are another big worry, with 40% of respondents stressed about unexpected medical bills.
Looking Forward
While financial resilience among middle-class families is holding steady, challenges like rising costs of living and slower resource growth still remain. NerdWallet reports that rent growth surpassed wage growth in most U.S. metro areas, acutely reflecting the most common financial stresses found in the index.
Essential expenses and access to resources will still be the key focus for middle-class households going into 2025. But the good news? Inflation is continuing to ease, which could bring some relief for many families.