A recent study by MassMutual has found an interesting trend among the younger generation of American consumers: financial security is more important than starting a family.
The survey revealed that nearly a quarter of those surveyed had no plans to start families of their own, citing their finances as the primary reason.
“With today’s financial stressors, it is understandable why there is a growing trend among young adults to prioritize financial security over parenthood,” said Paul LaPiana, head of brand at MassMutual. “This shift reflects a broader understanding of the importance of financial stability and independence in achieving long-term goals that every generation must reckon with.”
Financial freedom is key
The study came as part of MassMutual’s quarterly Consumer Spending & Saving Index. Between July 1-26, 2024, 1,000 adults over the age of 18, as well as an additional sample of 500 adult Massachusetts residents, were surveyed.
While about half of those surveyed reported being optimistic about their current financial status, the Millennial and Gen Z respondents had an interesting outlook on their futures.
Overall, just under 25% of the younger demographic said they don’t have plans of becoming parents, and their reasoning had a lot to do with finances:
43% said they don’t think they’re financially stable enough to support children
43% also said they prefer financial freedom over the financial constraints of raising children
31% said they don’t want future generations to inherit the current political/social climate
Consumers have legitimate concerns
When looking at the survey responses from consumers with children, the younger generations may have some fair concerns about parenthood.
Though nearly three-quarters of parents said they prepared financially for having children, money remains their top stressor, and more than 50% of parents worry about not having enough money to support their children.
According to the respondents, nearly 60% of parents say that food is the biggest child-related expense that causes stress, with clothes (51%) coming in second.
For consumers who may be on the fence, or feeling stressed about money, LaPiana recommends making the best choices for yourself and your future plans.
“It is crucial to respect each others’ journeys as we all navigate our financial futures and make informed decisions that align with our personal values and aspirations,” said LaPiana. “My advice? Control what you can control. Monitor your financial life and adjust where you can. Make thoughtful purchasing decisions. And invest in your future.”
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While it's not accurate to say that today's young people are not having children at all, it is true that birth rates among young people, particularly those in their 20s, have been declining in recent years.
Here's a more nuanced summary:
Declining birth rates: Birth rates among women in their 20s have reached historic lows. This trend is particularly pronounced for women aged 20-24.
Shift in peak childbearing age: While birth rates for younger women are declining, they're increasing for women in their 30s and 40s. This indicates a shift in the timing of when people are choosing to have children.
Desire for children remains: Research suggests that the desire to have children hasn't changed significantly. Most young people still intend to become parents, but they're choosing to delay having children.
Reasons for delay: The reasons for delaying parenthood are complex and multifaceted. They include financial concerns, career aspirations, relationship instability, lack of affordable childcare, and broader societal anxieties.
Not entirely unique
While the current decline is not unique in American history, it is certainly notable for its persistence and the low levels it has reached.
There have been other periods of declining birth rates:
The Great Depression: Economic hardship during the 1930s led to a significant decline in birth rates, as people postponed or forwent having children due to financial insecurity.
The 1970s: The availability of birth control, increased female participation in the workforce, and changing social norms contributed to a decline in birth rates during this decade.
However, the current decline differs in several ways:
Duration: While previous declines were often linked to specific events or periods of economic hardship, the current trend has been ongoing for over a decade.
Low levels: Birth rates among young women are at historic lows, surpassing those seen during the Great Depression or the 1970s.
Delayed childbearing: Unlike previous declines, the current trend is characterized by delayed childbearing rather than a complete rejection of parenthood.
While the U.S. has experienced periods of declining birth rates in the past, the current trend is notable for its persistence, low levels, and focus on delayed childbearing. This suggests a complex interplay of factors, including economic concerns, changing social norms, and evolving priorities among young adults.