Inflation is causing 76% of The Balance readers to cut back on spending, a new survey found. The cost of goods and services is up 8.3% since April of last year, declining slightly from March’s inflation rate of 8.5%.
Inflation has been taking a swing at consumer wallets as the cost of gas, groceries, clothes, housing, and more have jumped over the last two years. As inflation sits close to 40-year highs, The Balance readers say they’re struggling to keep up.
More than a fifth of readers surveyed are struggling to make basic payments like rent and bills while 29% say they are struggling “a little.” Encouragingly, more than 40% say they were not struggling at all to pay for necessities due to rising costs.
Cutting back on spending wasn’t the only way readers have been coping with inflation. A quarter say they are reducing their savings and investments, and 15% say they are cutting back on debt repayment. As the Federal Reserve continues to hike interest rates to fight inflation, borrowing money and paying off debt, like credit cards, will only get more expensive.
While it’s hard for anyone to ignore the soaring prices, 90% of The Balance readers say they felt inflation pinch the most at the grocery store. More than 80% say they noticed how much gasoline prices have gone up. Nationwide, gas prices have jumped again to more than $4 a gallon, hitting new record highs in mid-May.
A majority of readers (64%) also noticed increasing costs in dining out at restaurants while the price jumps in movies, concert tickets and sporting events was among those least-felt.
Raising rates is one of the main tools that the Federal Reserve uses to rein in inflation. Higher interest rates make borrowing more costly, curbing consumer and business spending. When interest rates increase, demand for items like cars or homes or credit cards drop. Declining demand, in turn, brings down prices.
The Balance conducted a survey among 418 of its newsletter readers and social media followers from April 6 to May 10, 2022. The survey was fielded online via a self-administered questionnaire. Respondents had to be living in the U.S. and 18 or older to qualify.
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