Advertiser Disclosure

News

Why That Stroller Strains So Many Parents’ Budgets

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Miami mom Stephanie Viney, 28, says she chose a pricey UPPAbaby stroller for its many features and sturdiness. Baby strollers come in a variety of styles and price points, from $20 to more than $1,000. (Photo courtesy of Viney.)

No one needs to tell a new parent that raising a child in America is a pricey endeavor.

New parents can expect to spend about $233,610 on a child’s basic needs through age 17, excluding savings for higher education, according to the U.S. Department of Agriculture.

One of the first purchases you’re likely to make as a new parent is a stroller. When it came time for Brooklyn resident JiaYao Liu, 23, and her baby’s father to buy a stroller for their baby boy, now 3, they walked into Babies R Us expecting to spend about $80-$100. They were sorely mistaken.

“I didn’t expect it to be that expensive until I went and I looked,” Liu says.“You just want to carry your child from Point A to Point B, and there are some strollers with a whole bunch of toys on them, and I don’t think it’s necessary.”

The couple ultimately purchased the most-affordable stroller they could find. Liu says it was a store brand and the practical choice, based on her needs. Still, at around $130, it was a little outside their price range.

New Orleans resident Demetra Pinckney, 29, had a similar experience when she and her husband picked out a stroller for their baby registry.

“They have some strollers that are $500, $600,” Pinckney says. “I’m thinking: ‘Oh my goodness. No, I have to live. They have good strollers that don’t have to cost you a whole paycheck.’”

The stroller she picked out and ultimately received as a gift cost about $400.

Over the past few decades the baby stroller has gone from a practical parenting necessity to a luxury item for some, says Paul Hope, senior home editor at Consumer Reports. While you can still find a budget-friendly stroller, an increasing number of new premium models are priced north of $1,000.

“What I think has happened is that we have really seen the emergence of a lot of premium brands and they have become sort of a status symbol,” says Hope.

Why are baby strollers so expensive?

Marketers and manufacturers have capitalized on a ripe market, says David Katzner, president of The National Parenting Center, a parent advocacy organization, explaining why more high-priced strollers have entered the market. The organization has reviewed parenting products since 1990 and this year reviewed its first $1,300 stroller.

“For parents, our testers, the sticker shock is remarkable,” Katzner tells MagnifyMoney. He says the high prices prompt some parents to jokingly ask if the stroller is magical — for the money, can it educate the children, or even change a diaper?

Some parents are willing to spend top dollar even for products that will only be used until their little ones are able to walk on their own.

Miami mom Stephanie Viney, 28, says an expensive stroller is worth it if you have the money to spend.

When she and her husband were getting ready to have their first child, Finn, now 23 months old, they picked out an upscale traditional stroller: the UPPAbaby Cruz stroller, car seat and accessories totalling $1,100 for their baby registry.

“It is definitely expensive once you get everything you need; what sold me on it was the big, easy-access basket underneath,” says Viney. The stay-at-home mother and hairdresser says the stroller has held up well and is practical for her on-the-go lifestyle. “The UPPAs are sturdy strong strollers. You get what you pay for.”

A year after they received their first stroller, the couple shelled out $1,200 to upgrade to an UPPAbaby Vista stroller, large enough to hold both Finn and his four-month-old baby brother.

What you’re getting for the money

The most expensive strollers may be made with premium materials like leather upholstery, have some extra padding in the seat area, larger wheels that absorb shock, cupholders or extra basket space underneath. Viney’s UPPAbaby Vista even incorporates a “piggyback” attachment, which will allow one child to stand and ride along when they’re big enough. She and her husband are both tall, so she says it helps they can adjust the handlebar up and down, too.

“With very premium priced strollers, you might get premium materials and construction [or] the brand name, but there are very few categories of anything we test where paying more gets you more in the way of reliability or performance or even longevity,” says Hope.

How to make an informed stroller purchase

Even for Katzner, who has been reviewing parenting products for over a decade, navigating the stroller industry is at times “very, very confusing.”

“Worst of all is walking a trade show floor when they are all just filled with all the same product,” says Katzner, whose position requires he often attend trade shows where manufacturers display new strollers, car seats, feeding and nursing systems and other baby products.

“In many cases the person in the booth is struggling to show how their stroller is different from the guy next to them,” he says. “You might find as a parent you are in the exact same place. You might say, ‘what’s the difference?’”

Compare and test drive

A stroller is not an insignificant purchase. You’ll need to purchase one just like you would need to purchase a car seat or any other baby items and you will likely use it for a number of years. With many options to consider, your decision may depend on myriad factors.

Whatever you do, don’t let peer pressure be one of them, says Katzner. He advises parents not to simply choose what’s popular or has the best ratings online.

He recommends parents to some online research, take notes, then go test out strollers in person before they settle on a pick.

If you feel pressured to keep up with your peers, keep in mind, Consumer Reports has not found any reason to buy a stroller that costs more than $1,000, says Hope.

While you’re at the store, try any of these shopping tips to help make your decision.

Consider your lifestyle

Stroller options can be categorized into three main families: traditional, jogger, and umbrella. (Though you can find strollers with mixed features.)

What you ultimately choose will depend on how you plan you use the stroller.

If you are very active and plan to exercise with the stroller or take it along with you on tough terrains, you may want to consider a jogger. On the other hand, if you will need to lift the stroller often, you may choose, instead, an umbrella stroller.

“Umbrella strollers are really fabulous for collapsing on the subway or in transit going to the airport,” Hope says.

After her son turned 2, Liu supplemented her first stroller purchase with a $20 umbrella stroller from Target.

“It was difficult because of the subway stations,” she says of her first stroller. “Every time I had to fold the stroller and carry my bags, my son and his bags up the stairs.”

However, many jogging and umbrella strollers can’t be used with children less than 6 months old, because they don’t always accept car seats. That’s why Liu bought the big, chunky stroller, first. Hope says most people opt for the traditional stroller, as it suits most needs.

“Traditional strollers that accept an infant car seat or are compatible are typically the best value,” says Hope. “You’re guaranteed that the stroller will be safe to use with a baby that is under six months.”

Test for ease of use

Put the stroller through a comprehensive test when you’re shopping to test how easy it is for you to use. After all, you’re the one who will be spending the most time with the stroller. Katzner recommends you choose something that makes your life easier.

Everyone will have different determining factors. In general, Hope suggests shoppers check for how it feels to do things like lift the stroller, strap in the child, adjust the backrest or lock the wheel brakes.

In addition, he advises shoppers to take the stroller for a ride to test how easy it is to navigate. Hope suggests going with a small child if you already have one — or ask a friend or family member if you can take their youngster for a test drive — to simulate real-life situations like making tight turns and encountering curbs.

Liu says her first stroller weighed about 10 to 15 pounds, and she could fold and carry it with one hand when traveling in the city. She says a basket underneath also came in handy when she went out grocery shopping or had her son with her and had to bring along a bunch of his things.

On the other hand, the Pinckneys have a pickup truck, which makes it easy to load and unload a bulkier stroller. They also live in a suburban area, where they are less likely to need to lift or fold the stroller.

Look for the JPMA logo

“There is not a whole lot you can look for as a consumer in the way of safety,” says Hope. But, organizations like the Juvenile Product Manufacturers Association (JPMA) regulate strollers and they test for a whole host of safety factors, so you don’t have to. Look for the JPMA logo on the stroller box to feel confident the stroller you put your baby in meets today’s safety standards.

Some strollers and online retailers like Amazon.com may display the National Parenting Center’s seal of approval, too. The organization has real parents test and review children’s products on many features, so you can get a sense of what it’s like to actually use the stroller. Although the strollers the NPC reviews are generally already JCMA-approved, the organization notes that its seal of approval does not imply or guarantee product safety.

Question the salesperson

The salesperson’s job is to make sales, but your job is to be a responsible consumer. If you get to the store with one stroller in mind, but the salesperson pushes you toward a different pick, ask why, says Katzner.

“Of course the salesman is going to try to sell you the $600 stroller,” says Katzner. “Put them to the test and ask why. What does it do? What’s the difference?”

In the end, you’ll walk out more confident in your choice having asked all your questions, instead of feeling as if you were coerced into choosing a stroller with features you weren’t interested in, or may not ever use.

Think ahead

Hope says most traditional strollers that carry an infant car seat can be used from when the baby is born until they are about four or five years old; traditional strollers commonly adjust to accept a child that weighs up to about 50 to 60 pounds.

If you plan to have more children, you’ll need to do some forward thinking when choosing your first baby stroller. A durable stroller can go a long way. And, as long as safety standards don’t drastically change, it could serve you for more than one child.

When they had their second child, Viney ran into an issue. She now needed a double stroller, but her UPPAbaby Cruz couldn’t be converted into one.

“Once I realized I got the wrong UPPAbaby I was very upset,” Viney says. Because they already had $500 worth of seats and accessories, they decided to stay with the same brand and get a UPPAbaby Vista — the new stroller and a second seat cost about $1,200.

“The sales guy should have definitely asked if we were going to plan for more kids because when spending this kind of money you want to have it for long,” says Viney.

The bottom line: Don’t follow the crowd

Asked if she would have chosen a more expensive stroller, were money no object, Liu says no.

“If at the time I had more money or wasn’t strapped for cash I would have gone with the same thing. It was practical. It was fine. I have no complaints about it,” says Liu.

Pinckney, on the other hand, says she would choose a more expensive stroller if it had features her current stroller is missing like a tray up top, for parents, or cupholders.

It all comes down to personal preference. Choose the stroller that best fits your lifestyle at the best price point for your budget. Most importantly, pick a stroller that will make your life as a parent that much easier.

“Do not go beyond your means,” says Katzner. “Do not get something that is going to be unwieldy and make your life more difficult.”

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Advertiser Disclosure

News

Survey: Millennials Are Underestimating Retirement Savings Needs

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone and is not intended to be a source of investment advice. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

For many savers, a cozy retirement can seem like a distant dream rather than a realistic future. Costs of living continue to rise, while it’s becoming harder for many to keep up with saving. More and more senior citizens are working into retirement, and millennials may be underestimating just how much they’d need to save for retirement in the first place.

MagnifyMoney commissioned a survey of 800 full-time workers to get a better look at their understanding of their own retirement savings needs. The results show that while millennials may be underestimating the real costs of retirement, so are baby boomers. Furthermore, some baby boomers indicated that no amount of money would make them comfortable enough to retire.

Key findings

  • 73% of full-time working Americans believe $1 million is enough to get them through retirement if they stop working at age 66. There was widespread agreement on this across all age groups.
    • $1 million in retirement savings is a general rule of thumb to follow, although an individual’s actual retirement savings should be more specific based on projected spending in retirement.

  • Meanwhile, nearly 1 in 5 millennials said having $500,000 in their retirement savings account would make them comfortable enough to stop working tomorrow. Another 14% of millennials would retire after amassing $750,000.
    • Millennials aren’t alone in believing less than $1 million is enough. Across all age groups, 20% of respondents said that $500,000 in retirement savings was enough. The next largest cohort — 17.4% of respondents — said $1 million in retirement savings was enough.
  • Interestingly, more than 1 in 5 baby boomers responded similarly to millennials, saying just $500,000 would get them through retirement if they stopped working tomorrow. Another 15% of boomers said $750,000 would be enough to retire.
  • Some baby boomer respondents offered a bleaker outlook: More than a quarter of Americans ages 54-73 reported that no amount of money would make them comfortable enough to retire.
    • Boomers were almost twice as likely to say that no amount of money would make them comfortable enough to stop working compared to younger Americans. 14.4% of millennials and 15.2% of Gen X-ers had the same sentiment.
    • Boomers may be less willing to stop working than other age cohorts because they believe they need to save more before they stop working, or because some feel you can never really have enough money saved for retirement.
  • More than 1 in 10 Americans have lofty goals for their retirement savings. Just under 12% of our respondents want to accumulate at least $3 million before ending their career.

How much should I save for retirement?

Saving for retirement is not an exact science. Shooting for a $1 million nest egg is a common rule of thumb — and most survey respondents agree that $1 million would be enough.

However, the amount of retirement savings you need depends on your estimated expenses in retirement. Your exact number could be more or less than $1 million, depending on how much you expect to spend on housing, discretionary costs or lingering debts.

For example, $1 million in savings would fund a 20-year retirement where you’re limited to $50,000 in annual spending. If you anticipate a 30-year retirement, $1 million in savings would only cover around $33,000 in annual spending.

How much you should have saved for retirement also depends largely on your age. For example, it’s unlikely that at 30 years old, you’ll already have $1 million set aside unless you’re extremely blessed. You’ll have to build up your savings as you go and as your income, hopefully, increases with age.

Fidelity offers a different take on savings guidelines by age. According to Fidelity, by age 30 you should have 1x your annual salary saved, growing to 3x your annual salary saved by age 40, 6x by 50, and 8x by 60.

How do I save for retirement?

If you think you’ve underestimated how much you truly need to save for retirement, there’s still time to get your savings on track.

A common retirement savings tool is the 25x rule, which dictates you need to have 25 times your annual retirement expenses saved. Core to this rule is the assumption that you’ll need to cover 25 years of retirement. So if you calculate an estimated $70,000 in annual spending in retirement, for example, following the 25x rule would indicate a nest egg goal of $1.75 million.

That’s a far cry from the mere $500,000 that 20% of our respondents indicated would be adequate for retirement. If you stuck to that goal, by the 25x rule, your annual spending in retirement would be cut down to $20,000.

It’s best to throw your retirement savings into an investment account, rather than a high-yield savings account. Over time, investing can post returns around 8%, well above the 2% savings APYs we see today. Retirement savings are more than just your 401(k), too: individual retirement accounts, or IRAs, allow you to save on your own, whether instead of or in addition to your 401(k).

If you’re an investing beginner, there are a ton of resources out there to help you get started. Robo-advisors and online brokerages offer an easily navigable investing experience that allow you to set your own goals and preferences.

Methodology

MagnifyMoney by LendingTree commissioned Qualtrics to conduct an online survey of 816 full-time American workers. The survey was fielded October 1-3, 2019.

We define millennials as those aged 23 to 38, Gen X as those 39 to 53 and Boomers as those aged 54 to 73. Members of Gen Z (ages 18 to 22) and the Silent Generation (ages 74 and up) were also surveyed, and their responses are included within the overall total percentages. However, they were excluded from the age breakdowns due to the lower sample size among respondents in those age groups.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Advertiser Disclosure

News

Survey: For 36% of Americans, Economy Informs 2020 Presidential Preference

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

The presidential election will dominate headlines throughout 2020, with voters and pundits alike obsessively following polls, reading coverage and watching debates to get a feel for who’s leading in the race for the White House. In addition, they’ll be closely watching another key indicator for the race: the performance of the U.S. economy.

MagnifyMoney commissioned a survey of 1,000 Americans to gauge how people think about the relationship between the economy and the 2020 presidential election. Our survey found that nearly four in ten respondents said monitoring the economy helps them decide which candidate to support, and believe the results of an election can be at least somewhat predicted by the performance of the economy.

Key findings

  • About 41% of respondents believe the outcome of a presidential election can be predicted based on U.S. economic performance in the 12 months leading up to the election.
    • Around 36% said monitoring the stock market and the economy helps them decide which presidential candidate to support.
  • Republicans are more confident than Democrats about three key aspects of the economy over the next 12 months: that the stock market will continue to rise, jobs will continue to be added to the economy and the overall economy will continue to grow.
  • Nearly 1 in 3 respondents think the 2020 presidential campaign will positively impact the economy — while about 18% believe the economy will be negatively impacted.
    • Investors are almost twice as likely as non-investors to believe the campaign will positively benefit the economy, and six-figure earners are also more likely to agree with this proposition.
  • Like many topics in politics, the potential economic impact of re-electing Donald Trump is a polarizing subject.
    • When asked which 2020 presidential candidate made them most optimistic about the future of the U.S. economy, the most-cited candidate was Donald Trump, with 33% of respondents overall.
    • When asked which candidate made them most pessimistic about the future of the U.S. economy, Trump was yet again the most cited candidate, by 35% respondents overall.

How could the state of the U.S. economy impact the election?

Our survey found that about 4 in 10 respondents think you can at least somewhat predict the outcome of the presidential election based on U.S. economic performance in the year leading up to the election. Meanwhile, 37% say that they do not think that economic performance could predict the election’s outcome, while nearly 22% were not sure.

Republicans were more likely than Democrats to say that economic performance could at least somewhat predict the 2020 election, 53% versus 43%. Meanwhile, 50% of millennials think that the state of the economy could at least somewhat predict the 2020 election, compared to 40% of Gen Xers and 32% of baby boomers.

Our survey asked whether people monitor the stock market and economic performance when deciding which presidential candidate to support. We found that the majority of people (64%) do not track such metrics when deciding who to support, while approximately 21% do somewhat and 15% do a great deal. The results didn’t differ greatly when considering party affiliation: 40% of Democrats and 42% of Republicans follow these metrics at least somewhat when determining who to vote for.

How could the election impact the U.S. economy?

While our survey revealed that many people think that economic conditions can help predict the outcome of the 2020 election, we also asked respondents how they think the election will impact the economy once the polls close and the next president is selected.

Overall, people feel very differently about how the 2020 election results will impact the economy, with 31% of respondents saying it will positively affect it, 18% saying it will negatively affect it, 42% saying they are unsure how it will affect it and 9% saying it will not affect it at all.

Those results look somewhat different when party affiliation is taken into account: 41% of Republicans said the outcome of the election will positively impact the economy, compared to just 32% of Democrats. Meanwhile, Democrats were more likely to say that the election would have a negative impact on the economy, 19% compared to 14% of Republicans.

Different generations also had different thoughts on how the election’s results might affect the economy, with millennials (39%) most likely to say they think it will have a positive impact, followed by Gen Xers (28%) and baby boomers (24%). In contrast, Gen Xers were the generation most likely to say the election will have a negative economic impact (20%), followed by millennials (18%) and baby boomers (15%).

Our survey also revealed how people think the stock market will react to a President Trump re-election. Overall, 31% of respondents think that the stock market will fall if Trump is re-elected, 26% think the market would rise, 28% are unsure of how the market would react and 16% think it won’t change. Not surprisingly, 50% of Democrats think the stock market will fall with a Trump re-election, while 52% of Republicans think it will rise.

How could the election impact investor confidence?

Everything from a CEO’s tweets to global trade deals has the potential to rattle an investor’s confidence — and our survey found that the 2020 election is no exception.

Interestingly, we found that overall, 37% of people avoid investing their money during election years. That includes 41% of Democrats and 39% of Republicans, as well as a whopping 56% of millennials, 29% of Gen Xers and 13% of baby boomers.

One reason for the lack of investment during election years could be chalked up to overall uneasiness about the state of the economy in general. When looking at the 2020 election in particular, many respondents aren’t too confident in many metrics that measure the health of the economy.

Overall, 28% of those surveyed are at least somewhat unconfident that the stock market will continue to rise, 30% are at least somewhat unconfident that the U.S. will continue adding jobs in the next 12 months and 29% are at least somewhat unconfident that the overall U.S. economy will continue to grow over the next 12 months.

When looking at confidence levels regarding the overall future of the economy, our survey found that Democrats are much more pessimistic than their Republican counterparts: 38% of Democrats were at least somewhat unconfident that the overall U.S. economy will continue to grow over the next 12 months, compared to just 19% of Republicans who feel the same way.

When looking at how the economy is now versus how it was on the night of the election in 2016, different political parties have very different viewpoints. Only 16% of Democrats think that the economy is in a better position now, compared to a whopping 68% of Republicans.

When asked which presidential candidate made them the most optimistic about the future U.S. economy and which one made them the most pessimistic, the most popular candidate was the same for both: Donald Trump. Overall, 33% of respondents said that Trump was the candidate that made them the most optimistic about the economic future, followed by Joe Biden (17%), Bernie Sanders (14%) and Elizabeth Warren (12%).

Meanwhile, 35% of respondents said that Trump was the candidate that made them the most pessimistic about the future of the U.S. economy, followed by Sanders and Biden (both at 14%) and then Warren (11%).

Methodology

MagnifyMoney commissioned Qualtrics to conduct an online survey of 1,048 Americans, with the sample base proportioned to represent the general population. The survey was fielded October 1-3, 2019.

In the survey, generations are defined as:

  • Millennials are ages 23 to 38
  • Generation Xers are ages 39 to 54
  • Baby boomers are ages 55 to 73

Members of Generation Z (ages 18 to 22) and the Silent Generation (ages 74 and older) were also surveyed, and their responses are included within the total percentages among all respondents. However, their responses are excluded from the charts and age breakdowns due to the smaller population size among our survey sample.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.