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 mortgage 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.
15 Items That Used to Be Cheap but That Are Now Shockingly Expensive
It’s no secret that the cost of living continues to rise. While some items have remained affordable, others have seen significant price hikes that might shock you.
From everyday essentials to guilty pleasures, here are 15 items that have become shockingly expensive.
15 Items That Used to Be Cheap but That Are Now Shockingly Expensive
I’m Frugal: Here Are My Top 30 Frugal Living Tips to Save Money
I’m super frugal, and one of my passions is sharing my frugal living tips with everyone.
Here are some of my absolute favorite frugal tips to help you get started on your journey to frugal living.
I’m Frugal: Here Are My Top 30 Frugal Living Tips to Save Money
15 Things That Are No Longer Worth It Because of How Expensive They Have Become
Everything comes with a hefty price tag these days. From indulgences to essentials, the cost of living keeps rising. We used to consider certain items affordable options, but now they’ve become so expensive that they’re no longer worth it. Here are 15 things that have lost their affordability and make us wonder if they are worth it!
15 Things That Are No Longer Worth It Because of How Expensive They Have Become
28 Practical Ways Frugal People Save Lots of Money
Saving money doesn’t have to mean saying goodbye to life’s little indulgences. With a few smart tweaks, you can stash away cash for that dream vacation, rainy day fund, or splurge-worthy purchase without feeling like you’re on a constant budget patrol.
Think of it as a side hustle that pays off without the extra hours. Whether you’re looking to conquer debt or simply boost your bank account, these tips are guaranteed to put more money in your pocket, painlessly.
28 Practical Ways Frugal People Save Lots of Money
14 Ridiculously Random Tips That Could Save You Lots Of Money
Want to save some money? There are so many ways to save money that are published in articles all day, every day.
It can be tiring to sort through them and find the ones that work for you, so we decided to scour the internet and find some of the best ones to share with you. But we couldn’t decide which ones to share with you, so we just decided to share the ones we liked, which means that these are pretty random!
14 Ridiculously Random Tips That Could Save You Lots Money