The 3 Most Serious Financial Challenges Families Face In 2024, According To An Expert

An April 2024 financial security survey by CNBC and SurveyMonkey found that 65% of United States consumers are living paycheck to paycheck; meaning, they need every bit of every paycheck to cover essential living expenses. Should they miss a paycheck, or even have it delayed, it could turn into a serious problem quickly, from a falling credit score to mounting debt to even learning what it means to have something go into foreclosure. This is the financial reality millions of individuals and families face today and it only adds to the financial challenges they already face day to day, as they attempt to budget, save, and plan for the future.

Jason Tartick, a bestselling author, finance expert, and podcast host, shared his thoughts of what financial challenges families face in 2024. As Tartick said, the only constant in the current economic conditions in America is change, and "things are changing in a massive way." Trying to maintain stability amidst this change is a challenge itself, and it comes at a time when families are dealing with higher prices for housing, food, and health care. Among the financial challenges Tartick notes, specific to families today, include affordable housing, saving for retirement (while still affording life), and a lack of savings.

The March 2024 Consumer Price Index summary from the Bureau of Labor Statistics reported a 3.5% inflation rate increase from the same time the year before. According to the report, the indexes for shelter and gasoline accounted for half of the rise for all indexes. For shelter, the index rose by 5.7%.

Families looking to buy a home in March 2024 will find properties selling for a median price of $420,321, per Redfin, which is 4.8% more year-over-year. For a house that costs this much, with a down payment of 20%, a family would need to take out a home loan of $336,000. At the current mortgage interest rate of 7.31% (as of April 24, 2024, per Bankrate), that would mean a monthly mortgage payment of $2,306.

Considering the amount you should spend on your mortgage based on income is 28%, that would mean a monthly salary of ~$8,250, which equals $99,000 a year. Meanwhile, the median household income in the U.S. is around $74,580 (as of 2022, according to the Census Bureau), or 24.7% less than what is needed for the above homebuying scenario.

In addition to affordable housing, Jason Tartick also pointed out saving for retirement as being a financial challenge for families in 2024. And to this, he added that it's not just saving for retirement, but also affording life. Considering that 65% of Americans are living paycheck to paycheck, this financial goal becomes all the more difficult.

Fidelity advises people to set aside 15% of annual income for retirement. While this is a goal all Americans likely wish they could afford, the reality is that it's a difficult number to reach when you are using every dollar to pay for living expenses in the now. For families, such financial decisions can be even more difficult, as they often need to make either/or decisions.

A Pew Research Center survey in 2022, when inflation reached 9.1%, a rate not seen since 1981, found that 25% of U.S. parents said there was a time during the year when they couldn't afford to buy food their family needed or pay their rent or mortgage. Twenty-four percent said they couldn't afford the medical/health care their family needed. While inflation in 2024 has slowed (to 3.5%), prices remain higher and saving for the future (i.e., retirement) can seem less pressing when the present needs to be taken care of first.

Speaking to us, Jason Tartick mentioned the financial stress connected to debt management, which, of course, ties into the ability to save. With Americans amassing household debt of $17.5 trillion (to end 2023), it's safe to say that many American families face difficult decisions daily, monthly, and year after year, as they try and figure out a way to stretch their dollar(s), save, and still look ahead.

Related to saving for retirement is the financial challenge of building savings for emergency use today, such as if you lose your job unexpectedly or if a family member has a medical emergency. In Bankrate's 2024 annual emergency savings report, the financial publisher found some good news: Americans were doing better with their savings. Thirty percent of respondents reported having more savings in their accounts today versus last year, while a high of 55% said they had more emergency savings than they did credit card debt. (With this said, 36% said the opposite.)

Saving is a challenge for anyone, especially these days. For singles, however, or for DINKs (dual income, no kids), both of whom don't have children, saving for three months' worth of expenses can be a lot easier than it would be for a family of three or four or more people. For families, everything gets multiplied, from food to the size of a home to perhaps the number of cars to electricity to the amount of health coverage you need.