Personal Finance
Women are finding it harder to make ends meet
As the run up to the U.S. presidential election has highlighted, there is a growing share of “childless cat ladies” in this country. There is also a larger share of single women with children.
As marriage rates fell, the number of women heading families rose.
Often, this comes with financial challenges. Many single mothers shoulder the financial responsibility of raising children while also being the primary caretakers, a dynamic that affects their labor market participation and income, according to a recent analysis by the Center for American Progress.
Roughly 75% of single mothers are working, and those with full-time jobs have a median annual income of $40,000, according to the Center’s analysis of 2022 data. Single fathers had a median income of $57,000 per year, the analysis shows.
Caregiving demands have largely contributed to a persistent gender pay gap, often referred to as the “motherhood penalty.”
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During the pandemic, caregiving responsibilities hit working women especially hard. Across the board, women in the workforce faced steeper job losses and slower job recovery than men, according to research by the U.S. Census Bureau.
But by most measures, pandemic relief helped more people get on their feet relatively quickly. In fact, the economic comeback has been one of the most remarkable in modern history, Marc Morial, president and CEO of the National Urban League, recently told CNBC.
Yet, even now, the labor force participation rate for women has not fully returned to pre-pandemic levels. In addition to reduced labor force participation, women’s jobs recovery has lagged men’s: Women now hold just over 3.1 million more jobs than they did in February 2020, while men now hold nearly 3.7 million more jobs, according to a separate report by the National Women’s Law Center.
“This is another area where we see returning to a pre-pandemic status quo as not good enough,” said Julie Vogtman, the National Women’s Law Center’s director of job quality.
Pandemic relief helped
“Deeper structural inequities” are hindering meaningful gains in women’s labor force participation, Vogtman said.
Federal relief aid, primarily through the American Rescue Plan Act, did help mitigate employment losses and create the conditions for strong jobs recovery and wage growth. It also prevented the care system from collapse and cut child poverty in half, according to Vogtman.
“These were historic investments, and it kept the child-care infrastructure from crumbling,” Vogtman said.
However, “the very programs that drove the recovery have now largely expired and, in their absence, have left women and families struggling and unable to meet the rising costs of goods, especially for child care and housing, two areas where rising costs have outpaced inflation,” Vogtman said.
Another recent poll found that 91% of single moms worry about their financial future.
Many women and families are still struggling
Although inflation has eased, many women struggle to get by with paychecks that cannot keep up with costs for housing, groceries, child care, health care and other expenses, the National Women’s Law Center also found.
At the same time, “the child care crisis, which was simmering prior to the pandemic, has come to a boil,” according to a separate KPMG analysis.
Between 1991 and 2024, the costs for child care rose at nearly twice the pace of overall inflation.
Now, “existing federal programs designed to support child care access among low-income families suffer from chronic underinvestment and structural limitations, leaving many parents and caregivers with impossible choices to make ends meet for their family,” Hailey Gibbs, associate director for early childhood policy at the Center for American Progress, said in a statement.
Poverty is higher for female-headed households
The American Rescue Plan of 2021 temporarily boosted the maximum child tax credit to $3,000 from $2,000, with $600 extra for children under age 6, and families received up to half via monthly payments.
As a result of the expanded child tax credit, the child poverty rate dropped to a historic low of 5.2% in 2021, according to a Columbia University analysis.
However, in 2022, the rate more than doubled to 12.4% once pandemic relief expired, the U.S. Census Bureau found.
The poverty rate for families with children headed by single women rose even higher, jumping from 11.9% in 2021 to 26.7% a year later. In 2023, it reached 28.5%, the National Women’s Law Center found.
Notably, the terms of the current child tax credit are set to expire at the end of tax year 2025. At that time, the child tax credit is scheduled to drop to a maximum $1,000 per child.
Home Alone (1990)
20th Century Fox
The classic Christmas movie “Home Alone” tells the improbable tale of a family who leaves their 8-year-old son home when they leave for vacation.
Yet in the years since the 1990 film was released, viewers have focused on another question — how wealthy was the fictitious McCallister family featured in the movie?
The family orders 10 pizzas on the eve of their trip, lives in a house that can sleep 15 people (including extended family) and all fly to Paris for the Christmas holiday.
“They’re well off and in a good place financially,” Cody Garrett, a certified financial planner, owner and financial planner at Measure Twice Financial in Houston, said of the first impression of the McCallisters’ circumstances.
But the family may not be quite as wealthy as they seem, Garrett said.
To better understand the details of the McCallister family’s financial circumstances, Garrett recently did a deep dive analysis of the family’s finances from “Home Alone” and “Home Alone 2: Lost in New York,” which debuted in late 1992, and hosted a webinar with around 25 financial planners to discuss financial planning opportunities that arise in the movies.
Both movies were shot long before social media made it popular to flaunt personal wealth online. Nevertheless, the lifestyle the McCallister family shows to the world may not necessarily be an indication of their wealth, Garrett said.
“There’s a lot of things that are showing that they spent a lot of money, or at least financed a lavish lifestyle to the public,” Garrett said. “But inside their own home, they’re actually maybe a little scared about money.”
What the McCallister lifestyle would be worth now
The Home Alone Experience created by Disney+, opens in London, offering an immersive experience inspired by the Christmas movie, with set recreations of the McCallister family’s home.
David Parry Media Assignments | PA Wire | AP
What looked lavish more than 30 years ago when the first two movies were shot is now even more luxurious today, thanks in large part to the effects of inflation.
The actual five-bedroom, six-bathroom Winnetka, Illinois, home where the movie was filmed was listed for $5.25 million in the spring. Today, it is still under contract, and a final sale price won’t be known until the deal is finalized, according to Zillow spokesperson Matt Kreamer.
To buy the house at $5.25 million today would cost approximately $34,000 per month, with principal, interest and property taxes, according to Kreamer. That’s with 20% down and a 7% mortgage rate.
To comfortably afford the home, you would need $100,000 per month in income, assuming you’re adhering to an affordability threshold of not spending more than one-third of your income on housing costs, Kreamer said.
“It’s a pretty spectacular house, and certainly one of the more famous movie homes that people can instantly recognize,” Kreamer said.
In 1990 when the first movie debuted, the home would have likely been worth a little less than $1 million, Kreamer estimates, which is still high for that time.
Yet the home may not necessarily point to a high net worth for the McCallister movie family.
“I would not be surprised if they don’t have much equity in their house,” Garrett said, given the couple’s stage of life and circumstances.
In the films, the McCallisters are also driving what at the time were relatively new cars — a 1986 Buick Electra Estate Wagon and a 1990 Buick LaSabre — each of which would be valued at $40,000 in today’s dollars, according to Garrett’s estimates.
While the family is eager to show their wealth — including mother Kate paying in cash for the $122.50 pizza bill while also offering a generous tip — they’re frugal when it comes to the things people don’t see, Garrett said.
How the family talks about money can sometimes point to a scarcity mindset, he said. For example, Kate mentions she doesn’t want to waste the family’s milk before they leave on vacation.
The family’s lifestyle isn’t paid for all on their own. Peter’s brother Rob actually foots the cost of the Paris trip for the family. That airfare would cost around $55,650 today, GoBankingRates recently estimated.
What financial planning lessons are hidden in the movie
Many major details about Kate and Peter McCallister’s finances are not disclosed, including what they do for a living.
Nevertheless, the financial planners who evaluated the family’s circumstances saw some holes that could be addressed with planning.
On the top of their wish list: proper insurance coverage.
Because Kate and Peter McCallister have five children, having enough life and disability insurance should they pass away or become unable to work should be a top priority to ensure their dependents are provided for, according to Garrett.
The movie — which includes many slips and falls at the family’s home as 8-year-old Kevin tries to ward off a pair of robbers — also signals a need for an umbrella insurance policy, in case the McCallisters are found liable for injuries or damages that occur.
Kate and Peter — who forget or lose their son Kevin in both of the first two “Home Alone” movies — would also be wise to make proper estate planning arrangements in the event they can no longer provide or care for their children. That includes having wills, powers of attorney, advance directives, beneficiary designations, trusts and proper account titling, all kept up to date.
The couple should name physical and financial guardians who can care for the children. They may also establish a pre-need guardian for the children who can step in if the parents are unable to care for them even for a short period of time, said Aubrey Williams, financial planner at Open Path Financial in Santa Barbara, California.
“If the parents are not there to take care of the kids, there’s the possibility that kids, even if briefly, will become a ward at the state because there’s no one to care for them,” Williams said.
After a strong start to the holiday season, consumer spending is on track to reach record levels this year. But many of those purchases will soon be returned.
December’s peak shopping days are closely followed by the busiest month for sending items back, which experts dub “Returnuary.”
This year, returns are expected to amount to 17% of all merchandise sales, totaling $890 billion in returned goods, according to a recent report by the National Retail Federation — up from a return rate of about 15% of total U.S. retail sales, or $743 billion in returned goods, in 2023.
Even though returns happen throughout the year, they are much more prevalent during the holiday season, the NRF also found. As shopping reaches a peak, retailers expect their return rate for the holidays to be 17% higher, on average, than usual.
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“Ideally, I hope there is a world in which you can reduce the percent of returns,” said Amena Ali, CEO of returns solution company Optoro, but “the problem is not going to abate any time soon.”
How returns became an $890 billion problem
With the explosion of online shopping during and since the pandemic, customers got increasingly comfortable with their buying and returning habits and more shoppers began ordering products they never intended to keep.
Nearly two-thirds of consumers now buy multiple sizes or colors, some of which they then send back, a practice known as “bracketing,” according to Happy Returns.
Even more — 69% — of shoppers admit to “wardrobing,” or buying an item for a specific event and returning it afterward, a separate report by Optoro found. That’s a 39% increase from 2023.
Largely because of these types of behaviors, 46% of consumers said they are returning goods multiple times a month — a 29% jump from last year, according to Optoro.
All of that back-and-forth comes at a hefty price.
“With behaviors like bracketing and rising return rates putting strain on traditional systems, retailers need to rethink reverse logistics,” David Sobie, Happy Returns’ co-founder and CEO, said in a statement.
What happens to returned goods
Processing a return costs retailers an average of 30% of an item’s original price, Optoro found. But returns aren’t just a problem for retailers’ bottom line.
Often returns do not end up back on the shelf, and that also causes issues for retailers struggling to enhance sustainability, according to Spencer Kieboom, founder and CEO of Pollen Returns, a return management company.
Sending products back to be repackaged, restocked and resold — sometimes overseas — generates even more carbon emissions, assuming they can be put back in circulation.
In some cases, returned goods are sent straight to landfills, and only 54% of all packaging was recycled in 2018, the most recent data available, according to the U.S. Environmental Protection Agency.
Returns in 2023 created 8.4 billion pounds of landfill waste, according to Optoro.
That presents a major challenge for retailers, not only in terms of the lost revenue, but also in terms of the environmental impact of managing those returns, said Rachel Delacour, co-founder and CEO of Sweep, a sustainability data management firm. “At the end of the day, being sustainable is a business strategy.”
To that end, companies are doing what they can to keep returns in check.
In 2023, 81% of U.S. retailers rolled out stricter return policies, including shortening the return window and charging a return or restocking fee, according to another report from Happy Returns.
While restocking fees and shipping charges may help curb the amount of inventory that is sent back, retailers also said that improving the returns experience was a key goal for 2025.
Now 33% of retailers, including Amazon and Target, are allowing their customers to simply “keep it,” offering a refund without taking the product back.
For shoppers, return policies are key
Increasingly, return policies and expectations are an important predictor of consumer behavior, according to Happy Returns’ Sobie, particularly for Generation Z and millennials.
“Return policies are no longer just a post-purchase consideration — they’re shaping how younger generations shop from the start,” Sobie said.
Three-quarters, or 76%, of shoppers consider free returns a key factor in deciding where to spend their money, and 67% say a negative return experience would discourage them from shopping with a retailer again, the NRF found.
A survey of 1,500 adults by GoDaddy found that 77% of shoppers check the return policy before making a purchase.
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