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More Americans Turning to Family, Friends, Prayer Than Advisors for Financial Advice

Nationwide Retirement Institute ® research also finds only about half of U.S. families feel confident they can save enough for retirement

Today, the majority of U.S. parents (60%) cite inflation or rising living costs among their top financial concerns as they look ahead at the next 12 months, according to a new survey by the Nationwide Retirement Institute. Less than half of parents (45%) have a positive perception of their family’s financial situation and nearly four in five say inflation and rising prices will influence their vote in mid-term elections. Nearly one-third (32%) want to see legislation to ease the financial burden on parents and caregivers.

This volatile environment is contributing to a grim outlook on the future, with 88% of parents expecting an economic downturn in the next year. Only about half of U.S. parents feel confident they will be able to save enough for retirement or their children’s education, and only 48% say they are on track to meet their financial goals.

While parents overwhelmingly want support with their family’s finances, more are turning to family and friends (56%) and prayer (29%) than a professional (27%) for financial advice.

“With the cost of living high and fear of a recession looming, parents’ confidence in their family’s financial situation is waning,” said Kristi Rodriguez, senior vice president of Nationwide Retirement Institute. “It’s understandable that families are looking for comfort during this difficult time, whether with friends and family or through their faith, but the most important step they can take is to connect with a financial professional and create a plan.”

Parents are making major lifestyle changes to offset inflation

In response to inflation pressures, U.S. parents are pulling back on discretionary spending. The top actions include:

  • Dining out less often (48%)
  • Reducing how much they drive (41%)
  • Purchasing different or cheaper items than they typically would (41%)

They are also relying more on credit to pay for items, with one in four (23%) reporting they have accumulated additional credit card debt and another 16% saying they’ve used ‘buy now, pay later’ apps or services in response to inflation.

Gen Z families are faring worse due to inflation

The study also found the inflationary squeeze is hitting Gen Z particularly hard, and they are leaning on safety nets to soften the blow. Twenty one percent received food or household goods from a food bank and 14% have moved in with family members in the past year, compared to the average of parents at 13% and 6%, respectively. Roughly three in four Gen Z parents (74%) report that they live paycheck to paycheck most of the time and nearly a third (29%) rate their family’s financial situation as ‘poor’ — almost double the average for U.S. parents overall.

The study revealed three key areas where Gen Z parents are struggling the most:

  • Paying for childcare: Roughly three in 10 (32%) Gen Z parents report they spend 50% or more of their take home pay on childcare, and one in five (21%) say they took on another job in the past year to better meet the needs of their children — nearly 10 percentage points higher than the national average for parents. Another one in 10 (9%) quit their job this year to focus on childcare.
  • Finding affordable housing: Despite homeownership being a top goal for 40% of Gen Z parents, half (49%) cite the cost of rent or housing as one of their top financial concerns — 21 points higher than among U.S. parents overall.
  • Planning for their family’s finances: Two in five (39%) Gen Z parents report they did not do any financial planning before they had children, compared to 28% of the national average. Another 87% of Gen Z parents say they wished they started saving or investing earlier.

Parents are taking their concerns to their employers

Parents are looking to their employers for improved benefits to help balance work and childcare. Nearly half of parents (48%) want to see increased flexibility in work hours, and more than a third (39%) want improved health insurance benefits. Nearly a quarter (23%) of parents want improved parental leave policies.

“While each family’s path to financial wellness is unique, our survey clearly demonstrates that there’s an immediate opportunity for financial professionals to help build confidence and security through financial literacy, especially for younger families who are struggling in today’s economic environment,” added Rodriguez. “Financial professionals can help with planning and other financial decisions such as maximizing workplace benefits to help families solve some immediate financial concerns.”

Edelman Data and Intelligence (DxI) conducted an online survey on behalf of Nationwide of 1,000 nationally representative adult U.S. parents ages 18 and over with children under the age of 18 and 150 Gen Z parents with children under the age of 7. The survey was fielded from July 11 through July 21, 2022.

About Nationwide
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