Raising children has never been an inexpensive prospect. But as living costs rise and childcare costs climb, many parents find themselves increasingly burdened.
Now the good news is that 75% of parents said they were doing well financially as of late 2021, according to new Federal Reserve data. But that may no longer be the case.
Stimulus Check Update: Did Parents’ Finances Take A Turn For The Worse?
Last year, parents enjoyed a number of windfalls that may have helped their financial situations improve. For one thing, Americans across the board saw $1,400 stimulus checks hit their bank accounts. Plus, parents were privy to a boosted Child Tax Credit stimulus check in 2021 that put a lot more money in their pockets.
Prior to 2021, the Child Tax Credit stimulus check had a maximum value of $2,000 per child. Last year’s boosted Child Tax Credit increased that value to $3,600 for children under the age of 6, and $3,000 for those aged 6 to 17.
The boosted Child Tax Credit stimulus check also became fully refundable, so families with no tax liability could still claim their money in full. Plus, half of the credit was paid in the form of monthly installments that went out during the second half of the year. That meant parents saw payments steadily arrive, as opposed to having to wait for their money as a lump sum tax refund.
But this year, no federal stimulus aid has gone out. Not only has there not been a broad round of stimulus checks, but the boosted Child Tax Credit went away in 2022.
At the same time, inflation has been soaring this year, driving the cost of everyday essentials like food and apparel up. As such, it’s fair to assume that while 75% of parents may have been doing well financially as of late last year, that may no longer hold true today.