As inflation intensifies, experts predict that the middle class will struggle to afford essential expenses like healthcare, college tuition, and housing. The U.S. Labor Department reported that the annual inflation rate for the year ending in March was 3.5%, an increase from the previous rate of 3.2%.
Understanding these escalating inflation costs is crucial for planning and anticipating expenses.
Here are seven things that the lower middle class can no longer afford 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.
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.
