I Asked ChatGPT To Stress-Test a Middle-Class Budget for a Recession

Core Insights - Affordability concerns are impacting middle-class budgets, with a projected 30% chance of a recession in 2026 due to factors like tariffs and restrictive immigration, which may lead to inflation and weak consumer spending [1] Group 1: Budget Analysis - A mock-up budget for a dual-income middle-class household in the U.S. with one child shows a total monthly income of $7,000 and expenses that match this income exactly, leaving no buffer [2][3] - The original budget includes categories such as housing ($2,300), transportation ($1,050), and child expenses ($1,400), among others, totaling $7,000 in expenses [3] Group 2: Stress-Tested Budget - A stress-tested version of the budget reflects a 20% drop in income to $5,600, necessitating a corresponding reduction in expenses to match this new income level [4][5] - Key changes in the stress-tested budget include a reduction in transportation costs to $700 and food expenses to $550, while housing and healthcare costs remain fixed [5] - The revised budget demonstrates that discretionary spending must be frozen, and savings contributions paused to align expenses with the reduced income [6]