New Study Shows Inflation’s Impact on How Families Spend in Stores and on Travel

• 62% of married parents with children at home reported annual household incomes of $100,000 or more.
• Married parents were 36% more likely to complete a retail purchase in the last 30 days than single consumers without children at home.
• Married parents with children at home were 77% more likely to complete a travel purchase recently than married couples without children living at home.

Parents with children at home are now thinking twice before spending their hard-earned money on retail or travel. Higher incomes are supposed to give them more spending power, but their recent cuts in discretionary spending show the impact of financial uncertainty.

Caring for kids can create unpredictable retail and travel needs that spur further spending. This dynamic reinforces the spending habits of many families with children at home — especially their more frequent retail purchases. Yet, as this report shows, despite their higher incomes, parents are becoming more cautious with their expenditures. They are balancing the need to provide for their children with the uncertainties of the current economic landscape.

These are some of the findings detailed in this report. Our insights come from a census-balanced survey of 2,789 U.S. consumers conducted between May 10 and May 28.

• Why Household Income Differences Matter
• Parents with Children at Home Are More Likely to Make Retail Purchases
• Parents Book Trips More Often, But Non-Parents Spend More
• Conclusion
• Methodology

Why Household Income Differences Matter

Married consumers with children at home tend to have the highest household incomes. This is particularly true when there are two working adults in the house. This trend is consistent across the age groups most likely to have children living at home. For example, most married millennial parents with children at home (64%) have an annual household income of more than $100,000. This dual-income advantage lets at least some parents cover increased spending in retail and travel in response to their children’s needs. It may also inform household formation in the first place.

Meanwhile, both single parents with children at home and individuals without children at home report lower average household incomes. This is likely due to the absence of a second income earner. In fact, 62% of single Generation X parents with children at home and 81% of single millennial parents with kids in the house report household incomes of less than $100,000. The greater economic stability among married parents can ideally support greater financial flexibility and spending capacity. However, households with or without kids at home have unique spending priorities and can occupy very different financial positions. Retailers and service providers need targeted strategies to address these differences.

In short, parents are not a homogenous group. Retailers and service providers must understand the economic disparities between households. Targeted strategies should consider the financial constraints of parents who earn less and the possible flexibility of those who earn more. This approach can help anchor a market differentiation strategy. Ensuring marketing efforts are more comprehensive and inclusive in scope is also essential.

Parents with Children at Home Are More Likely to Spend on Retail Purchases

At first glance, data suggests that targeting parents with children still living at home is crucial for retailers. But a deeper dive into our findings shows that single consumers without children at home could be a group as interesting for merchants as parents with kids at home. For example, married consumers with children decreased their retail spending from an average of $147 in 2022 to $114 in 2024.

For instance, 32% of these married parents recently purchased clothing and accessories, compared to 18% of married consumers without children at home. Likewise, 16% of married parents’ most recent retail purchases were related to hobbies, products common for kids.

Moreover, married parents with children at home are more likely to buy consumer electronics and sporting goods than consumers without children at home. For example, 13% of these married parents’ most recent transactions were for consumer electronics, compared to 3.3% of married individuals without children at home. Similarly, 11% of married parents bought sporting goods, compared to 3.7% of single consumers without kids in their households.

These trends emphasize the need for targeted strategies to effectively reach and engage this demographic. Merchants that do so effectively may be able to maximize retail sales even as parents spend less on retail overall. In this environment, retailers must compete for fewer dollars.

Parents Are More Likely to Book Trips, But Non-Parents Spend More

Families with children at home are more likely to make travel purchases than those without young children. However, they also continue to spend less on travel year over year. This pullback in spending suggests these households are trying to manage expenses even if they must make more travel purchases than their childless counterparts.

Factors such as planning around spring breaks and summer vacations likely influence families’ travel spending behavior. Single-parent households are no exception. For example, these families were 39% more likely to make travel purchases than single consumers without children at home.

Meanwhile, households without children usually spend more money on their trips — up to 38% more.

Married consumers without children at home are helping to keep the overall spending of households without children on travel services elevated. These households are spending the most on travel this year: $620 on average compared to married parents, at $326. Spending by older individuals without children at home may explain why spending by households without children is 90% higher than what parents spend. Notably, married baby boomers and seniors without children at home spend $754 on average for travel services. This is significantly more than any other type of household.

This spending behavior presents a substantial business opportunity for travel-related merchants targeting high-spending segments.

But not every set of married parents falls into this category. On average, married parents have spent 11% less on travel services in 2024 compared to last year. This decrease suggests that travel-related merchants may need to make strategic adjustments to attract and retain this crucial segment.

Conclusion

Retail and travel spending among families with children has shown notable downward shifts in the past two years. This decline contrasts with households without children, whose spending remained relatively stable. Economic uncertainty and concerns about household budgets are likely driving these reductions in discretionary spending.

Likewise, parents are spending less per trip compared to previous years. Households without children, particularly those comprised of older individuals, spend the most on travel. This suggests that while parents with children at home continue to travel, they’re more budget-conscious. This development highlights a significant business opportunity for travel-related merchants to differentiate themselves through value-driven offerings.

Families with two working adults tend to have higher incomes. However, this dual-income advantage must still compete with the higher spending that comes with meeting children’s wants and needs. Retailers must adjust their marketing and strategy to align with these trends. Merchants that do so can gain a crucial competitive advantage and may be able to capture a greater share of families’ spend.

Methodology

“The Last Transaction: Family Spending Habits Reveal Merchant Opportunities in Retail and Travel,” a PYMNTS Intelligence exclusive report, explores how consumers completed their last transaction and the latest trends in payment preferences across demographic groups and retail sectors. This data is vital for understanding recent shifts in purchasing behaviors. For this report, we surveyed 2,789 U.S. consumers between May 10 and May 28. Our sample was balanced to match the U.S. adult population in a set of key demographic variables: 51% of respondents identified as female, 35% were college educated and 38% declared incomes of more than $100,000 per year.

For more, read the June 2024 report, “Contrasting the Consumer Credit Habits of Choice and Necessary Financers.”