When prices of goods and services first started rising sharply more than a year ago, many of us were caught by surprise. After all, it had been four decades since America had experienced a bout of sustained inflation.
But the reality of higher prices has sunk in by now, and we’ve had plenty of time to craft plans to deal with our new circumstances. Families across the U.S. have done just that, according to Primerica.
The financial services provider recently surveyed 1,384 American adults to find out what measures they are taking to protect their budgets during these trying times.
Following are the ways middle-class families in the U.S. are coping with inflation.
1. Preparing for a recession
When Americans look at the economy, they turn very sour indeed.
More than three-quarters — 77% — expect the nation will fall into a recession before the year is out.
And the future doesn’t look much brighter, with 61% expecting economic conditions to worsen over the next 12 months and just 14% expecting them to improve.
So, they are battening down the hatches and getting ready for tough times.
2. Planning to cut back on spending
Folks who are worried about a recession are cutting back on spending in several ways. They include:
- Cutting back on restaurant/takeout meals: 71% (up from 57% in March)
- Keeping their current technology instead of upgrading: 69% (up from 44% in March)
- Budgeting or cutting back on groceries: 49% (up from 37% in March)
If inflation has you spooked, check out the tips in the Money Talks News podcast “Inflation Is Surging: 20 Ways to Fight Higher Prices.”
3. Reassessing major purchases
More than one-third of Americans (38%) say they have delayed a major purchase in response to rising interest rates.
Yet, that understandable reluctance to splurge only helps so much. Many people still find themselves struggling to rein in their day-to-day spending, with 31% of respondents saying they use their credit cards more now. That’s a 10-percentage-point increase from early 2021.
Learn more about ways to keep more cash in your pocket by reading “9 of the Best Ways to Save Money on a Tight Budget.”
4. Rethinking future financial plans
This may be the age of the Great Resignation, but Primerica’s survey respondents seem to be rethinking this whole notion of retiring early: 42% now plan to work longer before they retire. And 22% plan to seek out higher-paying work.
Overall, 75% of employed middle-income Americans don’t believe they’ve saved enough to retire comfortably. That’s a jump of 10% since March.
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