BMO Real Financial Progress Index: 82% of American Parents Say Costs are "Out of Control"

• The BMO Real Financial Progress Index finds that nearly 4 in 5 Americans wonder how the people around them afford to have families
• 3 in 4 parents believe that financial support from extended family is essential these days to afford opportunities for their children
• Parents living close to extended family save money, but have higher financial stress as part of sandwich generation

CHICAGO, Aug. 20, 2026 /PRNewswire/ -- New data from the BMO Real Financial Progress Index reveals how American families are navigating mounting financial pressure and why many parents may be approaching a financial breaking point. The overwhelming majority of American parents (82%) say the cost of raising kids has "gotten out of control" – and their concerns are widely shared. Nearly four in five of all Americans (79%) wonder how people around them can afford to have families.

"Raising kids has always been a labor of love, but right now, it is also a major feat of financial engineering with families torn between spending on the urgent and the important," said Robin Growley, U.S. Head of Consumer Products, BMO. "Whether you are budgeting for diapers or dorm rooms, the absolute best antidote to daily financial stress is a clear, actionable plan."

On a yearly basis, parents with kids under 18 years of age at home in the U.S. estimate that they are spending:

• $5,498 on groceries
• $3,331 on family travel and vacations
• $2,469 on childcare including babysitters and daycare
• $2,445 on healthcare
• $1,886 on college savings
• $1,271 on clothing and shoes 
• $1,007 on extracurriculars, such as sports and music lessons
• $926 on baby supplies 
• $878 on entertainment, such as toys, video games and streaming services
• $836 on summer camps or after school programs

While the expected costs of college savings and daycare predictably drain wallets, the data reveals that the real budget buster is mealtime. Parents report spending more on food than almost any other category. According to the US Bureau of Labor Statistics, food at home has become 33% more expensive since 2019, growing five times faster than the previous seven years combined.

While everyday inflation stretches household budgets thin, parents with children under 18 confess that social pressure to keep up with peers is affecting their psyches and wallets. Most feel an unspoken demand to keep up with other parents (74%) and say the constant scroll of seemingly successful parenting influencers on social media fuels their comparative anxiety (76%).

With rising costs, parents are being forced to choose, with 86% of all parents saying the everyday costs of parenting like daycare, afterschool programs, summer camps and back to school supplies negatively impact their ability to save for their children's future.

It takes a village, but family help goes both ways

As costs spiral, parents are leaning on every branch of the family tree to make ends meet. These days, 76% of parents with children under 18 believe financial support from extended family is essential to afford opportunities for their children. 

Nearly two in five (37%) parents of young children expect to receive financial help (or plan to ask for it) from their own parents or grandparents in the next year. Among this group, 47% will receive cash to help with general day-to-day expenses, 43% depend on active grandparents to step in as free childcare or cover costs, and approximately one in four (26%) say their family will help fund their children's future in a 529 or other savings account.

For those fortunate enough to have nearby relatives, the savings are tangible. Nearly half (45%) of Americans with young children at home live close to family who can help out – and this proximity has real impact. Parents with local family support say they save $1,915 per year on childcare, cashing in on babysitting services from willing grandparents ($1,646 vs. $3,561) and $1,443 per year on groceries ($4,660 vs. $6,103). Proximity also boosts peace of mind, with 85% of these parents expressing confidence in their finances compared to just 71% of those without a local support network. 

But the proximity to family help also comes with unspoken expectations. The responsibility to care for the next generation is a two-way street: 70% of parents with local family support are also responsible for the financial or emotional well-being of their own aging parents, compared to just 45% of those who do not have family close to home. Roughly seven in ten parents who live near loved ones identify as members of the sandwich generation – simultaneously supporting young children and aging relatives. This feeling of responsibility weighs heavily, with 60% of parents receiving childcare assistance from local family viewing giving money to extended family as a non-negotiable monthly expense, similar to rent or a utility bill. 

Perhaps due to the additional responsibilities that come with familial proximity, parents who get help from family experience higher degrees of financial stress. In fact, parents who live close to loved ones who are receiving childcare help are much more likely to regularly feel overwhelmed by financial responsibilities (74% vs. 57%). 

"Most people make decisions to live near family with their hearts, not their spreadsheets, but those choices carry real financial consequences. Having a grandparent help raise your kids can be one of life's greatest gifts, but family caregiving is often a reciprocal arrangement—and it can be a lot when you're already stretched thin," said Growley. "That's why we encourage families to sit down together with a financial advisor and communicate openly about finances within their family. When everyone's working toward the same goals together, you're building a plan that lets you show up for the people you love."

Beyond those with family in the same area, just under half (45%) of all American parents identify as part of the sandwich generation. Among this group, 71% care for parents or in-laws, 57% care for other aging family members, and 43% care for extended family with additional functional needs. In general, these caregivers spend $2,865 per year, but costs can differ depending upon specific needs. For example, caregivers estimate that elder care costs $1,389 on average and general financial support like purchasing food and clothes costs $1,640. 

Climbing the corporate ladder with strollers in tow

The financial effects of parenthood extend far beyond bringing up baby – they reshape entire career trajectories and parental earning power.

• Parenthood over Paycheck: Most parents attest that they have sacrificed their career and earning potential to have a family.
• Double the Income, Not Half the Stress: Dual-income households do not escape financial anxiety. Seventy-two percent of two-income households experience regular financial stress, and 47% say having a child has negatively impacted their finances—numbers nearly identical to single-income households (43%). 

"Even for power couples with two paychecks, you can't out-earn the stress of modern parenting. The best way working parents can fight this is to recognize this disparity early, actively advocate for their worth, and negotiate their career trajectory on their own terms," added Growley.

The AI anxiety is real, but so is the hope

Parents are deeply anxious about what the future holds for their children. In the current economic climate, 77% of parents actively worry about their children's financial future, while 78% worry about how the rapid rise of AI will impact their children's future ability to earn a living. 

Yet, optimism persists: more than four in ten parents with children under 18 in the house (42%) believe AI will ultimately better prepare the next generation for financial success, and 23% are already proactively utilizing AI tools to streamline and manage their family's daily finances, including 30% of millennials. 

Under pressure, but making progress

Despite the financial pressure of modern parenting, families are proving remarkably resilient. Encouragingly, 54% of parents with children at home feel like they are making real financial progress, compared to just 42% without kids. Raising kids might be expensive and rewarding, but it's also motivating families to get serious about their financial futures.

No matter the size or composition of your family, BMO offers steps to make Real Financial Progress:

• Plot the path forward: Weighing a move to be closer to family, having another kid, or paying for public or private college tuition? Use the new DollarGPS app to plug in different financial choices and project future long-term impacts to see how life's sliding doors can impact a family's financial future.
• Get back to school: No matter the life situation, brushing up on financial fundamentals is a great way to make financial progress. Access resources on BMO's Real Financial Progress Hub to study up with the personal finance tools and resources to reach financial goals.
• Bring the family financial unit together: For the family that shares financial responsibility across generations, consider meeting with a financial advisor together to create a plan that works for the whole family.

To learn more about how BMO can help parents make real financial progress, visit https://www.bmo.com/us.

About the BMO Real Financial Progress Index
Launched in February 2021, the BMO Real Financial Progress Index is an indicator of how consumers feel about their personal finances and whether they are making financial progress. The survey aims to spark dialogue that will help consumers reach their financial goals and to humanize a topic that causes anxiety for many: money.

The research detailed in this document was conducted by Ipsos in the U.S. from June 8, 2026 to July 13, 2026. A sample of n=2,500 adults ages 18+ in the U.S. were collected via the Ipsos panel. Quotas and weighting were used to ensure the sample's composition reflects that of the American population according to census parameters. This survey has a credibility interval of +/- 2.4 per cent or 19 times out of 20, of what the results would have been had all American adults 18+ been surveyed. Average spend figures exclude outliers to avoid extremes impacting averages.

About BMO Financial Group 
BMO Financial Group is the eighth largest bank in North America by assets, with total assets of $1.5 trillion as of April 30, 2026. Serving clients for more than 200 years, BMO provides a broad range of personal and commercial banking, wealth management, global markets and investment banking products and services across Canada, the United States, and select markets globally. BMO is innovating for business value, by deploying and integrating human, digital and artificial intelligence to personalize client experiences, augment teams, and automate its business responsibly. Driven by its purpose, to Boldly Grow the Good in business and life, BMO is committed to driving positive change in the world, and making progress for a thriving economy, sustainable future, and stronger communities.

SOURCE BMO US