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13 Basic Necessities Middle-Class Americans Cannot Afford Anymore Due to Inflation
8 days ago
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As inflation tightens its grip, experts believe the middle class will find it challenging to cover essential expenses such as healthcare, college fees, and housing. The U.S. Labor Department revealed that the annual inflation rate was 3.5% for the year ending in March, higher than the previous rate of 3.2%.
Being aware of these rising inflation costs is critical as it will help you further plan for the future, knowing what costs to anticipate.
Here are 13 things the lower middle class can’t afford anymore due to inflation.
Higher Education Tuition and Fees
Private and higher education costs have risen over the years due to increased operating costs and declined state funding, making them unattainable for most lower-middle-class families. Additionally, most lower-middle-class families struggle with stagnant wages, making it challenging to keep up with the rising costs.
Healthcare Costs
Over the next few years, the lower-middle class won’t be able to afford the rising healthcare costs. Apathy from medical treatment, copays, deductibles, and health insurance premiums have become expensive, especially for families who need regular medical care or those suffering from chronic health conditions.
Many lower-middle-class families may find their income constrained to cover long-term care for themselves or their aging parents.
Homeownership and Real Estate
Research shows that homeownership rates are higher post-COVID than pre-pandemic, making it difficult for the lower-middle class to find affordable homes. As home prices skyrocket, experts believe that the lack of enough homes and high interest rates are reasons the middle class may struggle to own a home.
Access to Leisure Activities
Many in the lower-middle class won’t be able to go on vacations, see movies, attend sports events, or participate in other recreational activities. That’s partly because they are still trying to pay off student loans and credit card debt. The rising cost of living is also why most Americans can no longer afford everyday leisure activities.
Housing Expenses
The lower-middle class is struggling with strained budgets, making it a challenge to cover rent or mortgage payments. A survey by Redfin revealed that half of Americans have struggled to afford their rent or montage at some point this year.
Some have taken drastic measures such as canceling vacations, working overtime, and selling their belongings to keep up with their housing payments. The high rent costs, low number of affordable units, high cost of home loans, and housing construction deficit are reasons why most families may be struggling to afford housing.
Utility Expenses
A recent GoBankingRates poll revealed that 82% of people struggle to pay for utilities. Out of that figure, 21% cannot afford utilities due to inflation, rising costs of essential items, and reduced federal funding. With more lower-middle class opting to buy food and pay for housing, only a few have enough income to cover their utility bills.
Reliable Transportation
The U.S. Department of Transportation reveals that transportation is the highest annual consumer expenditure, accounting for $12,295 annually. That includes car purchases, gas, and maintenance costs. The lower middle class may be unable to drive frequently or cover maintenance costs in coming years due to the rising costs.
Childcare Services
Childcare costs are becoming prohibitive for many lower-middle-class families, especially those with kids requiring full-time care and those with multiple children. As more parents enter the workforce, the demand for childcare services has increased, further pushing the prices of childcare services.
The rising costs of supplies, staffing, and facilities have steadily increased over the years, making it challenging for the lower-middle class to afford the high childcare fees.
Retirement Savings
A survey by Bankrate discovered that 55% of Americans are behind in their retirement savings. The lower-middle class is struggling with stagnant wages, a high cost of living, and limited access to employer-sponsored retirement plans, making it difficult to save for retirement.
Additionally, most lower-middle-class families carry significant debt, such as medical bills, credit card debt, and student loans, which can take up a large part of their income. Paying off debt has taken priority over saving for retirement.
Pets
While pets may bring us endless joy and comfort, they become expensive companions for the lower middle class. Apart from food, vaccinations, grooming supplies, collars, boarding, and training, pet owners also have to account for pet insurance, which is costly.
The rising costs are making it a challenge for pet owners to afford pets, with a percentage admitting that they would find it difficult to pay for their pet’s minor operation.
High Insurance Premiums
Insurance premiums are becoming more expensive due to market conditions, economic factors, and other claims-related costs. For example, the cost of repairing damaged cars and homes has sharply increased due to rising material prices and labor.
Research shows home and auto insurance premiums are surging higher than overall inflation. Rising insurance premiums for health, home, and auto can strain the budgets of lower-middle-class families, making them hard to afford.
Home Internet and Cable TV Services
Home internet and cable TV costs have increased due to high business costs and inflation. A study by Cord Cutting revealed that the average cable and internet service increased by 52% in three years, rising from $96 to $147 per month. The lower middle class may find these services expensive due to their restricted income and limited access to affordable plans.
Exclusive Memberships
Exclusive memberships in clubs, gyms, and other recreational facilities are known for high membership fees and extra costs. In the coming years, the lower middle class may not afford to pay exclusive memberships due to limited disposable income after covering other expenses like healthcare, food, and housing.
Rising costs beyond the membership fee, like subscription fees, equipment rentals, or minimum spend, might also strain their budget, making it costly.
Understanding Inflation
These are some of the things that are becoming harder for lower-middle-class people to afford. By understanding how inflation affects their purchases, the middle class can determine how their decisions affect their finances and be more strategic with resource allocation, thus ensuring sustainability.
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