American households are entering 2026 with a record $18.8 trillion in debt, a personal saving rate that has fallen to 3%, and a growing reliance on credit counseling, according to new data from the Federal Reserve Bank of New York, the Bureau of Economic Analysis, and nonprofit agencies.
The debt figure, the highest on record, reflects the cumulative impact of inflation and elevated interest rates. The saving rate, which last touched this level in mid-2022, indicates that many families are dipping into reserves to cover everyday expenses. This trend is particularly pronounced among parents, who are juggling childcare, education, and healthcare costs.
Parents feel the squeeze
A BMO survey of 2,500 U.S. adults found that 82% of parents say the cost of raising children has "gotten out of control," and 79% of all respondents wonder how others afford to have families. Parents with children under 18 estimate spending $5,498 annually on groceries, $3,331 on family travel, and $2,469 on childcare, with additional outlays for healthcare, college savings, and extracurriculars.
Food prices have risen 33% since 2019, a pace five times faster than the previous seven years combined, according to Bureau of Labor Statistics data cited in the BMO report. "Raising kids has always been a labor of love, but right now, it is also a major feat of financial engineering," said Robin Growley, U.S. head of consumer products at BMO.
The strain extends to savings and retirement. Some 86% of parents say everyday parenting costs are hurting their ability to save for their children's futures, and 72% of dual-income households report regular financial stress. Nearly half of parents identify as part of the "sandwich generation," supporting both children and aging parents. A separate Allianz study found that childless Americans are more confident about retirement than parents, underscoring the financial gap.
Financial secrets and delayed milestones
Financial pressure is also reshaping relationships. A TD Bank survey of 2,000 adults found that 59% have felt scared or embarrassed discussing finances with a partner, and 68% feel pressure to appear more financially successful than they are. Three in ten admitted to hiding a purchase or financial decision from a spouse or family member, with concealments ranging from bad credit scores (21%) and credit card debt (16%) to gambling habits (14%) and secret bank accounts (11%).
"Money isn't just influencing financial decisions; it's influencing relationship dynamics," said Marc Womack, head of client experience at TD Bank US. Some 75% of respondents said they had delayed at least one major life milestone because of finances, with paying off debt (23%), travel (21%), and buying a car or home (17% each) topping the list. Gen Z is the most affected, with 85% delaying a milestone, compared to 57% of baby boomers.
Credit counseling at record levels
The cumulative pressure is driving more Americans to seek professional help. Money Management International (MMI), one of the largest nonprofit credit counseling agencies, reported record enrollments in its debt management plans in the first half of 2026, the highest in data going back to 2017. Financial counseling sessions rose 9.5% year-over-year and have surged 143% since the first half of 2021.
"Americans continue to wrestle with high inflation and elevated interest rates," said Ted Rossman, principal consumer finance analyst at MMI. "Many households have depleted their savings and accumulated record amounts of debt." Millennials make up 43% of MMI's clients, carrying an average unsecured debt of $40,900, while Gen X clients owe $48,171. Gen Z is the fastest-growing segment, up 35% year-over-year, with average balances rising 12% to $20,152.
Nearly half of MMI's new clients carry unsecured personal loans, a 10-point increase since 2020. While many intend to pay down higher-rate credit card balances, the approach often backfires, as clients continue accumulating revolving debt and return for counseling when they can no longer obtain new loans.
AI enters the picture
Artificial intelligence is playing a growing role in personal finance. Thousands of distressed consumers navigated directly from ChatGPT to MMI's website in the first half of 2026, a threefold increase since ChatGPT launched its personal finance experience in May 2026. Those clients enroll in debt counseling at the highest rate of any referral channel. The BMO survey found that 23% of parents are already using AI tools to manage family finances, including 30% of millennials.
For advisors, these trends suggest a client base under significant stress, with implications for retirement planning and debt management. As HSA balances hit record levels but remain largely in cash, and home equity reaches $18 trillion while the buyer pool shrinks, the financial landscape for families remains challenging.
