Fact Sheet Wellness Check: Financial Instability Among Families with Infants and Toddlers
Caroline Ratcliffe, Archana Pyati
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Families with infants and toddlers face significant, ongoing child-related expenses, such as daycare, diapers, and formula, that can strain household budgets. Couple these with unexpected shocks, such as a medical bill for a sick child or lost wages from caring for a sick child (i.e., no paid leave) and a lack of emergency savings, and it’s easy to see how families with young children—even against a backdrop of low unemployment and an improving economy—struggle with financial instability.

We turned to data from a unique data source—the Urban Institute’s Well-Being and Basic Needs Survey—to understand financial instability among parents of young children, which can have short- and long-term consequences for children’s development.

The survey found that a significant share of parents of children under age 3 face financial challenges, including unexpected drops in income, unexpected expenses, and the inability to cover a $400 emergency expense. Low-income parents of young children are substantially more likely—in some cases twice as likely—compared with all parents of young children to face these challenges.

Research and Evidence Family and Financial Well-Being Work, Education, and Labor Health Policy Housing and Communities Tax and Income Supports Research to Action
Expertise Families Social Safety Net Wealth and Financial Well-Being Labor Markets Reproductive and Maternal Health Upward Mobility and Inequality Early Childhood
Tags Poverty Asset and debts Economic well-being Family and household data Children's health and development Workers in low-wage jobs Families with low incomes Wealth inequality Mobility Volatility Work-family balance Financial products and services Unemployment and unemployment insurance Kids in context From Safety Net to Solid Ground Children and youth