Many younger Americans are worried that the relative financial freedom they enjoy in their childfree lives would be impossible to maintain if they started a family, according to the latest Consumer Spending & Saving Index from MassMutual. The quarterly survey provides insights into consumers' financial habits, beliefs and expectations within the current economic landscape.

“With today’s financial stressors, it is understandable why there is a growing trend among young adults to prioritize financial security over parenthood,” stated Paul LaPiana, CFP, head of brand, product and affiliated distribution with MassMutual. “This shift reflects a broader understanding of the importance of financial stability and independence in achieving long-term goals that every generation must reckon with.”

Notable findings of the latest Consumer Spending & Saving Index include:

FINANCIAL FREEDOM DRIVES YOUNGER GENERATIONS TO OPT OUT OF PARENTHOOD

• Nearly a quarter (23%) of Millennials and Gen Z without children do not plan to become parents, primarily due to financial reasons. Furthermore, 31% of Millennials and Gen Z who say they don’t plan to become a parent attribute this to the social and political world their children would inherit.

• A preference for financial freedom and the inability to afford children are equally cited by 43% of younger generations.

FISCAL CONCERNS TOP ANXIETY LIST FOR PARENTS DESPITE PREPARATION

• Money woes are the primary source of anxiety for parents, despite nearly three quarters financially preparing for parenthood (73%).

• The most common pre-parenthood financial preparation was increasing savings (38%).

• Nonetheless, over half of parents remain anxious about not having enough money to support their family (51%).

• Food (57%) and clothing (51%) are the largest child-related expenses contributing to this stress.

BACK-TO-COLLEGE BUDGETS BLOAT

• Nearly half (47%) of parents sending their children to college this year anticipate higher spending compared to last year, driven by rising tuition costs (65%) and inflation (63%). This marks a notable increase from last year when only 29% expected higher spending.

• Fewer Americans with student loans are worried about defaulting than they were last quarter (43% Q3 2024 vs. 53% Q2 2024).

• A majority (71%) expect to pay off their student loans before retirement, with three in five parents with student loans aiming to clear their debt before their oldest child turns 18, up from 43% last quarter.

RETIREMENT SAVINGS SHORTFALL

• Retirement savings remain a critical concern, with almost half (48%) of non-retired Americans feeling their savings are insufficient to retire by their desired age. Generation X is particularly affected, with 55% believing they are behind.

• Half of non-retired Americans are contributing 6% or less of their income towards retirement.

• Nearly half of Gen Z does not contribute a fixed amount monthly, with 24% contributing nothing at all.

AMERICANS UNITED IN ECONOMIC WORRY

• As the U.S. Presidential election approaches, 13% of Americans now believe the election will have the biggest effect on their personal finances, second only to inflation (40%). This is a notable increase from 8% in the previous quarter and 6% in the same period last year.

• Democrats (15%) and Republicans (13%) alike express these apprehensions.

“It is crucial to respect each others’ journeys as we all navigate our financial futures and make informed decisions that align with our personal values and aspirations,” concluded LaPiana. “My advice? Control what you can control. Monitor your financial life and adjust where you can. Make thoughtful purchasing decisions. And invest in your future.”

Methodology

The MassMutual Consumer Spending & Saving Index tracks financial outlooks and behaviors in a changing economic environment. It offers an in-depth snapshot of people's saving and spending behaviors and examines sentiment and attitudes toward navigating the changing state of the economy with an emphasis on inflation, spending, and changes in interest rates. Commissioned by MassMutual, the research was conducted online by PSB Insights from July 1 to 26, 2024 among a nationally representative sample of 1,000 U.S. adults (ages 18+). Research was also conducted with an additional sample of 500 adult Massachusetts residents within that same timeframe.

About MassMutual (Massachusetts Mutual Life Insurance Company)

MassMutual is a leading mutual life insurance company that is run for the benefit of its members and participating policyowners. Founded in 1851, the company has been continually guided by one consistent purpose: we help people secure their future and protect the ones they love. With a focus on delivering long-term value, MassMutual offers a wide range of protection, accumulation, wealth management, and retirement products and services. For more information, visit www.massmutual.com.

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