National Survey: Two-Thirds of Middle-Income Families Believe They are Falling Behind the Cost of Living

This national survey sheds light on the sentiments of consumers regarding their economic stability during this quarter finding that even amid reports of an improving economy they are not feeling the effects in their pocketbooks. Two-thirds of middle-income families reported they are falling behind the cost of living.

This perception may be influencing individual financial habits with 80% of households reportedly cooking more meals at home instead of dining out or ordering takeout over the past year. The top two reasons for this shift in behavior were budget concerns, with 72% of respondents acknowledging this as a primary factor, followed by unreasonably high restaurant prices, which was a key factor for 62% of respondents.

This latest FSM™ survey coincides with the release of Primerica’s Household Budget Index™ (HBI™), which indicates middle-income households experienced a slight increase in purchasing power as the HBI™ rose for the first time in 5 months — 100.3% in May, up from 100.1% in April 2024. While a positive indicator as inflation slows down, middle-income households are still struggling to make up financial ground, with purchasing power running only slightly higher than the index baseline of January 2019.

“It’s mildly encouraging that, after taking overall inflation into account, middle-income households saw an average real income gain of 1.3% over the past 12 months,” said Amy Crews Cutts, Ph.D., CBE®, economic consultant to Primerica. “Yet as gasoline prices fell, the costs of other necessity goods rose more quickly, and it will take time for people to feel that both the broader economic and their own financial standing are on the rise.”

Key Findings from Primerica’s U.S. Middle-Income Financial Security Monitor

• Reports of cutting costs or pausing savings altogether by middle-income families remained steady. During the first quarter, 46% of families reported they were scaling back with 48% reporting the same during the second quarter.
• The percentage of people cooking at home has increased. There is a major shift in spending and saving habits among middle-income families, including a staggering 4:1 ratio of families who report cooking meals at home compared to eating at restaurants or ordering takeout.
• Majority grasp financial basics but not complexities. Overall, two-thirds (65%) of households feel confident in making sound financial decisions without outside help, particularly when it comes to financial fundamentals like building good credit (87% confident), paying down credit card debt (83%) and creating and following a financial budget (74%). However, households continue to express less confidence when it comes to more complex financial matters, including setting up a retirement account such as a 401(k) or Individual Retirement Account (IRA) (66% confident), buying life insurance (63%), and investing in stocks (50%).
• Anxiety and limited time are the main drivers in lack of financial planning. More than a quarter (31%) say they don’t contribute to a savings account, follow a budget, contribute to an investment account or set a financial budget each month. Anxiety (29%) and not having time (19%) continue to be cited as the biggest challenges people have tracking their financial information.