BLOOMINGTON, Ill.– Back-to-School season looks very different for Americans this year; and with the closures of schools and childcare centers around the country to prevent the spread of COVID-19, parents are facing a unique set of financial challenges.
A new survey from COUNTRY Financial reveals that 21 percent of parents have already had to change or reduce work hours due to changes in school or childcare options, while seven percent had to leave a job altogether—both changes that could negatively impact monthly income.”
Now, the Back-to-School season is bringing additional financial burdens, with more than half (51 percent) of parents with children under 18 reporting they are experiencing additional financial concerns this year as a result of the pandemic.
“Parents are being forced to make financial decisions that were not a part of their plan before the pandemic hit,” said Troy Frerichs, Vice President of Investment Services at COUNTRY Financial. “Now, they’re faced with the possibility of leaving a job or reducing their work hours to homeschool or help their kids with remote learning, which can have a major financial impact on their household. Now is a time parents have to reassess their financial goals and create a new game plan that takes changes to their income as well as new expenses into account.”
Parents Take on Additional Expenses in Unique Back-to-School Season
Parents have experienced more financial stress during the pandemic, with nearly a quarter of parents surveyed (22 percent) reporting that COVID-19 has impacted their ability to pay bills, compared to 12 percent of non-parents. Additionally, since the start of the pandemic, parents have been more likely than non-parents to delay paying rent, credit card bills, auto insurance bills and retirement contributions, with 27 percent of parents having to delay at least one of these payments compared with 17 percent of non-parents.
The atypical Back-to-School season is compounding these financial stressors, creating additional expenses for parents – especially parents of children learning remotely this fall. The survey found that parents’ overall greatest financial concerns as their children head into Back-to School season include increased food costs (26 percent), the cost of new technology and internet service (21 percent) and an increase in childcare expenses (13 percent). Parents estimate they’ll spend up to an additional $500 per month (68 percent) to cover these costs.
A third of parents (34 percent) with children attending classes virtually this fall are concerned with the cost of food, compared with just 19 percent of parents with children attending school in-person. Those attending hybrid (28 percent) or homeschooling (31 percent) are more concerned about purchasing new technology or equipment than those attending school in-person (15 percent).
Meanwhile, parents with children under the age of 10 are significantly more worried about increased childcare expenses (19 percent) and having to change or reduce their hours to take care of their children (18 percent). Additionally, parents with children under five worry about losing their job due to performance issues because of a lack of childcare (13 percent).
“With schools and local governments making decisions about whether our children will be learning in-person or virtually this fall, it’s easy for parents to feel as though they have lost control and can’t keep up financially with all of the disruptions to their plans,” continued Frerichs. “My challenge to parents is to sit down and create a new plan addressing their most important needs such as managing day-to-day cashflow and affording everyday expenses first, then protection such as insurance, and long-term savings such as retirement or college funds.”
Parents with Adult Children Also Feeling Financial Strains
In addition to parents of school-aged children, parents with children 18 and older are also feeling additional financial burdens as a result of the changes brought on by the pandemic.
The survey found that one in five parents (21 percent) with a child college-aged or older have had their child move back in with them during the pandemic. Parents have also had to help their adult children with a variety of different expenses, with 50 percent of parents helping their adult children pay everyday expenses including their cell phone bill, gas or groceries, 21 percent helping to pay healthcare costs and 11 percent helping to pay rent or mortgage expenses.
While some parents may have been financially supporting their adult children prior to the pandemic, 35 percent of parents of adult children report they have been providing a moderate amount of additional financial support to their children during the pandemic compared to before it.
“For adult children facing new financial challenges as a result of the pandemic, there’s no shame in moving home to save money—in fact, for some, it could be the best financial strategy,” said Frerichs. “However, parents should make sure when taking on some extra expenses for their adult children, they are not losing sight of their own long-term goals, like their retirement. Setting boundaries and expectations are especially important as parents help their adult children get back on their feet during a difficult time.”
To learn more, visit COUNTRYFinancial.com.
About COUNTRY Financial®
The COUNTRY Financial® Group (www.countryfinancial.com) serves about one million households and businesses throughout the United States. It offers a wide range of financial products and services from auto, home, business and life insurance to retirement planning services, investment management, and annuities. Visit COUNTRY Financial on Twitter @HelloCountry, on Facebook @COUNTRYFinancial and on Instagram @countryfinancial.
