6 Common Bills That Middle-Class Families Can’t Afford in 2024
A common theme for most middle-class families has been the challenge of increased expenses caused by inflation. Certain costs are becoming unaffordable for the average American family in 2024.
Find Out: What Income Level Is Considered Middle Class in Your State?
For You: How To Get $340 Per Year in Cash Back on Gas and Other Things You Already Buy
Here’s a look at specific bills that are very common and are becoming more challenging for a middle-class family to afford.
Digital Services and Internet
“A unique and increasingly burdensome expense for middle-class families is the cost of digital services and internet connectivity,” said Garrett Smith, a veteran financial advisor at Ascend Investment Partners. “As our world becomes more digitized, what was once a luxury is now necessary.”
As a family, you likely have to spend money on a phone plan and digital services so everyone has access. This expense has been adding up, because additional data is necessary and more digital services are required due to the introduction of new platforms.
Smith elaborated, “Families must maintain multiple streaming services for education and entertainment, high-speed internet for work and learning, and the latest technological devices to access these services. These costs add up quickly and are becoming essential for daily life, education and employment, placing an unexpected strain on middle-class budgets.”
Learn More: 7 Things the Middle Class Won’t Be Able To Afford in the Next 5 Years
Be Aware: Toilet Paper to Discontinued Items: 7 Ways Shrinkflation Has Come to Costco
Insurance
If you’ve renewed an insurance policy in the last few months, you’ve probably noticed that your rates have increased. These are the most noticeable insurance plans that have gone up in price.
Health Insurance Premiums
“Following several decades of stability, the cost of healthcare has risen faster than the pace of inflation,” said Erika Kullberg, attorney, personal finance expert and founder of Erika.com. “Health-insurance premiums have shot up, as well, and now top the list of most expensive monthly bills for the massive middle class. Premiums have climbed faster in recent years than wages, eating up more of [families’] disposable income.”
You want to ensure that your family’s health is protected, but the rising costs make this an expense that is difficult to add to the budget.
Car Insurance
“Premiums for car insurance have been rising steadily over the past few years,” said Kullberg. “This can be attributed to many reasons, such as rising costs for repair, more accidents and insurance fraud.”
As a family, you likely can’t manage without a vehicle, since you must transport everyone. The cost of auto insurance may add an additional burden to your budget.
Explore More: 7 Popular Clothing Brands the Middle Class Can’t Afford Anymore
Dining Out
Dining out, once considered a regular family activity for middle-class people, is now becoming more expensive, and treating your family is essentially a luxury, since the bill can get pretty hefty.
According to inflation data from the Bureau of Labor Statistics, the annual price increase for dining out slowed to 4.5% in March. However, dining-out prices have increased over the last few years due to labor shortages and strong consumer demand. A regular middle-class family may not be able to enjoy dining out as often as they once did.
Housing Costs
“Across the country, housing costs have increased in many cities and increased at levels that can easily outpace income growth among most families, creating not only financial but also mental burdens in finding appropriate residences,” said Kullberg.
Middle-class families are feeling the pinch when it comes to basic housing costs. Rate hikes have raised interest rates and the overall cost of mortgage/rent payments.
Redfin recently reported that half of homeowners and renters are struggling with making their housing payments. Many Americans have admitted to making sacrifices to cover their housing expenses just to have a place to live. Some have even dipped into their retirement savings to handle housing expenses during this challenging time.
Childcare Expenses
“Daycare, after-school programs and summer camp can consume a third or more of middle-class family income,” Kullberg said.
If you have young children in daycare or who want to participate in activities, you’ve noticed that these costs have increased. This expense may lead to further issues in the summer, when families have to make difficult choices about childcare.
Discover More: How Far a $100,000 Salary Goes in America’s 50 Largest Cities
Credit Card Bills
The final point is that these increased expenses lead to higher credit card bills for middle-class families. As families struggle to stay on top of their bills, they turn to credit cards to handle expenses to get by another month.
According to recent data from the Federal Reserve Bank of New York, credit card balances for Americans increased by $50 billion in the fourth quarter of 2023, reaching a new record high of $1.13 trillion. This shows that more people are relying on credit to cover the bills as they struggle with monthly expenses that are constantly going up.
Closing Thoughts
With life getting more expensive for families, it’s crucial to take financial planning more seriously than ever before. As frustrating as it is to see prices constantly increase, these increased expenses can’t be ignored.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: 6 Common Bills That Middle-Class Families Can’t Afford in 2024
