Welcome to NerdWallet's Smart Money podcast. I'm Sean Piles.

And I'm Anna Hielhausky. This is our weekly personal finance news roundup, where we take a look at recent developments in the world of money and then go in-depth on an issue that's important to your life and your bottom line.

Today, we're going to look at a new NerdWallet report on the financial well-being of single-parent households over time. Nearly a quarter of all kids in the US live in a single-parent household. We're going to hear how they're doing.

But first, a few money headlines from the last few days.

So Anna, would you like to see a picture, a snapshot?

Oh, yes, please. I like pretty things, though.

Well, we don't pay a lot of attention to the daily movements of the stock markets here on Smart Money. But it's worth a snapshot to look at two record-breaking events over the last week.

Set the scene for us, Sean.

Well, within the last few days, the S&P 500 Index hit a record high, and the Dow Jones Industrial Average crossed the 38,000 mark, also a record high. As always, these are snapshots. And for the millions of Americans who invest for the long term through their retirement accounts or college savings plans, the advice is always not to pay attention to the daily movements of the markets.

Or even weekly or monthly. Yes.

Quarterly is good, annual is even better. That said, it's clear that the market has turned around from the S&P's most recent lows in October of 2022. One of the measurements Wall Street uses to determine a new bull market is when stocks go above what they were before a downturn, and now that's happened.

But it's just a snapshot, right, Sean?

Yes, a pretty one, as you requested, but just a snapshot. One we all hope will continue as we open our quarterly statements for retirement savings.

Well, Sean, maybe that's part of the explanation for this next piece of news, which is that apparently people are starting to feel significantly better about the US Yes, the latest report on consumer confidence from the University of Michigan shows a nearly 30% jump just since November. Merry Christmas and a Happy New Year.

And a happy lower gas prices and less inflation pressure.

Yeah, there are likely all kinds of metrics playing into this number. But if people are feeling like they're not seeing the price hikes that they were for a year or so at the grocery store and at the pump, and if their 401k balances aren't dropping, that can make us all feel like we're getting a bit more for our money after the long spike make of inflation.

I'm curious how our listeners feel about that statistic. Are you feeling like the economy is getting better? Send us a note at podcast@nerdwallet. Com and let us know if your consumer confidence is up and why. All right, how about one more indication that might make some folks feel better about their financial situation, at least if they own or want to own their home? Mortgage rates have dropped to their lowest level since last May.

Yeah, the average rate on a 30-year fix was 6.2 6% at the end of last week. Folks might remember that just a few months ago, the average hit just shy of 8%.

This means a couple of things from both sides of the real estate transaction. First, if you're a home buyer, you might be able to get more house because you won't be paying as much in interest over time. Second, if you're a home seller, you might find the market loosening up a little because buyers have a bit more incentive.

We're already seeing sellers start to adjust their pricing. According to Redfin, the median home sales price climbed 4% year over year in December. That's the biggest jump since October of 2022.

Yeah, I saw that Redfin is reporting a resurgence in bidding wars. All that said, though, 2023 was not a good year for the housing market. According to the National Association of Realtors, sales of existing homes fell to their lowest level in 30 years. Do they say what goes down must go up?

No, they do not say that. But for those who are in the market, here's hoping. That's what we saw over past week in Money News. Let us know what we missed and send us the headlines you've seen and want to hear more about.

Now on to our in-depth look at single-parent households with our fellow nerd, Elizabeth Runter. Elizabeth Renter, welcome back to Smart Money.

Hey, thanks, Sean. I'm always happy when you invite me back.

Elizabeth, you analyze 30 years of federal data to measure the financial well-being of single-parent households over time. For listeners, financial well-being includes factors like income, networth, and homeownership rate. Can you walk us through how single-parent households have fared over the last 30 years?

Sure thing, Anna. It's really common sense that households with a single parent and single potential earner would have a harder time than those with two parents and two potential incomes. But rather than comparing the finances of single parent households against those with two parents, because like I said, probably pretty common sense findings, I decided to look at how things have changed. So have they gotten better or worse for single parents? And if so, by how much? Perhaps surprisingly, they've gotten better by many measures. And in some instances, they've improved at rates far faster than other household types, whether those households are couples with children, couples without, or single people without children.

That is actually really surprising to hear. Here's some context for listeners about single-parent households. The US, reportedly, has the world's highest rate of children living in a single-parent household, nearly one quarter of all children in the US. These households consist of one adult, parent, grandparent, aunt, uncle, etc, living with one or more children under the age of 18.

Now, Elizabeth, you were raised by a single parent, and are a single parent yourself. As you were analyzing this data, did you find that any of the trends resonated with your own personal experience?

You're right, Anna. The time period that I looked at actually examined part of my childhood being raised with my two brothers by our mom and the years that I was the head of a single parent household from 2000 when my daughter was born until she was a college student in 2022. There was some interesting overlap with the data. My mom's experience was different from mine. She received child support, and I didn't, but she was raising three kids, and I was raising just one. I was on public assistance in one form or another when my daughter was young. My mom, on the other hand, didn't qualify for public assistance, in part because of the additional income she was getting through child support. However, when I was a kid, we did receive free school lunches, and that's common proxy for childhood poverty. In both instances, there was pretty significant room for growth. In both instances, mine slightly more than my mom's, there were significant improvements in our household finances during our years raising our kids. In that way, my experience did resemble what I saw in these national aggregates from the New York Fed. But it's also important to point out that not everyone's experiences do.

By and large, single-parent household finances have improved over the past 30 years, but there are definitely single single-parent households that have struggled more than the averages illustrate.

In your analysis, what did you find about the income of single-parent households over that 30-year period?

From 1992 to 2022, typical income among single-parent households grew 45%, and that's after adjusting for inflation. Among all household types, income grew 27%. Because these are real or inflation-adjusted figures, it means that these higher incomes are going far further in paying for the things that these households need.

How about networth, Elizabeth, including homeownership?

There were really dramatic changes in networth among single-parent households during that time. Inflation adjusted networth, which is the value of your assets like your home, minus your debts, like your mortgage, grew 189%. They almost tripled among single-parent households during that 30-year period. That's far faster than networth among all other household types. A big part of that increase was driven by homeownership. In 1992, about 43% of single-parent households owned their home, and that reached half or 50% by 2022. That was a bigger increase than any other household type during that period as well.

All these numbers are telling a really positive story that I think runs counter to much of the doomerism we hear in the media. I'm really heartened by this, but I'm wondering why. I'm wondering what are some of the factors behind these improvements in income and networth?

It's a great question. First, we know that household finances, on average, across the board, improved during this period. It's not like single-parent households were out here just killing it and everybody else wasn't. But why such considerable growth among these households, specifically? That's a little bit trickier, but I think a good portion of it can be attributed to progress in women's finances in general. We know that moms make up 80% of the heads of single-parent households in this country, according to the census. Women haven't always had the same financial opportunities as men. For example, women couldn't even apply for loans or credit until 1974. For context, that's the year one of my brothers was born. I'm no spring chicken, but that wasn't that long ago. Massive changes like that take time to filter through the economy. Also, the stigma surrounding both women in the workplace, women in higher education, and single parenthood in general have changed in recent decades. By and large, people can make the conscious choice to raise a child alone now, and for the most part, not worry about being shunned for it. It's just wild to think that it wasn't that long ago that that wasn't the case.

Right. Those are pretty massive shifts in a really short period of time. However, your analysis found that single-parent households were still less equipped to bear financial shocks. What are some of the challenges that these particular households face?

Well, part of that is common sense. If you have those two earners or even two potential earners in a household, you're likely to be better insulated when there are unexpected expenses or a job loss, for example. Single parents just have fewer of those safeguards cards built in. As such, the data showed that single parent households are most likely to carry credit card debt from month to month. And these households saw the most significant change here of any household type during the pandemic. From 2019 to 2022, the share of these households revolving credit card debt or carrying it from month to month actually rose by 15%, and that's more than any other household type.

For those who struggle financially or are less able to meet financial shocks, what are some concrete ways to create a safety net?

Well, one good way to think about this is to build in those safeguards that you might be lacking. That doesn't necessarily mean in a single-parent household to find a partner. If that's the route you want to go, more power to you. But let's acknowledge that doing this isn't easy when you're already struggling or raising kids on a single income. It feels more difficult because it is more difficult to start from a deficit or to do it all yourself versus with another income. So give yourself some grace there. Having an emergency fund in place is really the first step to protecting yourself against these financial shocks. Also, you want to do your best to keep your credit in good shape. If you do have to fall back on credit cards or a loan, you can qualify for better terms. As you're working on these things, know what community resources are available to you. Having some emergency solutions in your back pocket, whether it's knowing where the local food pantry is or knowing what local charity can help you keep the lights on when times get really tough, and then also not being too proud to use them.

This can save you some time and some stress if you do find yourself in those dire straits.

Thanks for sharing your analysis and your personal experiences and those tips here today, Elizabeth.

Absolutely, Anna. It's always a pleasure.

That's it for this week's Money News. We always welcome your money questions and comments. Turn to the nerds and call or text us your questions at 9017-730-6373. That's 9017-730-N-E-R-D. Or send us a voice memo at podcast@nerdwallet. Com. And remember to follow, rate, and review us wherever you're getting this podcast.

Today's episode was produced by Tess Bigland and edited by Rick Vandermeer-Knaife. Sarah Brink mixed our audio.

And here's our brief disclaimer. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.

With that said, until next time, turn to the nerds.