Despite a flat growth in July, Americans are still navigating an expensive economyA recent report from Forbes Advisor takes a closer look at the impact inflation is making on ordinary consumers. Access more information about this report here.
Inflation stayed flat in July after rising 1.3% in June, according to a report from the Labor Department on Wednesday 10 August. Despite this, research from Forbes Advisor confirms that Americans are being forced to make hard choices as they navigate an increasingly expensive economy, with prices remaining much higher than they have done in recent years.
Insights taken from the latest Forbes Advisor study of 2,000, highlighted that Americans are increasingly cutting costs and looking for other ways to save money.
In response to this, Forbes Advisor has revealed 10 ways Americans are changing their spending behavior amid inflating costs. Research lays bare how consumers have adjusted their consumption in relation to almost everything, from transport, to dining out to date nights!
Ten Ways Inflation is Changing Consumer Behavior
1.) American’s are tightening their wallets, in line with rising grocery prices
Research from Forbes Advisor has discovered that more than half have cut back on non-essential items when shopping for groceries (51%) and almost half (45%) of Americans have changed their grocery shopping, to buy cheaper alternatives .
Further to this, consumers are being forced to minimize how many groceries they purchase. Overall, two in five Americans are buying less groceries as a result of inflating food prices (39%) and one third have reduced their weekly grocery budget (31%). Moreover, just one in six (17%) Americans do not claim to have adjusted their spending when shopping for groceries
2.) People are reducing travel, to save on rising transportation costs
More than half (55%) are reducing the frequency of non-essential journey’s to save money on transportation. While, one in five Americans (20%) are cutting back on the number of long journeys they are taking.
However, some have adjusted how they get around, as more than one in six (16%) are walking more frequently to reduce fuel and transportation costs. With rising costs, some people may struggle to fill up a full tank at once, as they await more cash flow As a result, almost one quarter are filling up less fuel in their cars to save spending in one go (24%).
3.) People are cooking more often and planning meals
When dining at home, half have cut down on takeouts and are opting for more home cooked meals (49%). And when it comes to cooking, one third are meal planning more regularly to avoid wasting food (32%) and almost one in three are cooking with more basic ingredients, instead of pre-prepared options (29%).
Food waste is clearly on people’s mind, when it comes to how they plan to save money. More than two in five are using leftovers to avoid food waste (46%) and one in six are batch cooking more regularly (15%).
4.) Americans are making use of old clothing items and searching for bargains
More than two fifths of Americans are wearing old clothes more often than previously, to avoid spending money on new ones (43%). Two in five Americans are primarily buying sale or discounted clothes, to make up for inflated prices (40%).Within this figure, one quarter (24%) are turning to thrift shops or second hand stores/market places more than ever.
Almost one in five are cutting down on designer clothes and accessories (18%). Worryingly on an environmental level, one in ten are turning to “fast fashion” clothing more than ever, due to cheaper prices.
5.) Dining out is less common
Unfortunately the survey unveiled bad news for the restaurant industry, which is still trying to claw its way back from the pandemic. Two thirds of Americans (62%) are choosing to dine out less frequently, as a result of inflated prices. One third are both dining at more affordable restaurants (30%) as well as actively choosing to order cheaper items on the menu.
Sadly, it is the restaurant staff who are really missing out. One in ten diners are tipping less money than the usual percentage, to save where they can (10%). Overall, 84% of Americans have changed their spending habits when it comes to dining out – the most common spending cut.
6.) Leisure spend has been cut, along with date nights and social plans
Overall, thirty-nine percent of survey respondents said they’re engaging in fewer leisure activities like concerts, festivals and the cinema— again, bad news for those industries, which are also still struggling. This has resulted in Americans spending less time with their friends, as one third are making social plans less often (30%) and (29%) are socializing with friends at home more regularly.
Furthermore, rising everyday costs are causing couples to spend less money on quality time together. One in five couples are going on fewer date nights, to save money (20%) and more than one in six people are opting for cheaper locations when going on dates (18%).
7.) Being savvy with everyday savings
Consumers are making a concerted effort to be savvy savers when it comes to everyday spending. More than one third have started utilizing coupons more regularly, as a means to save money (37%). Similarly, one quarter (25%) have swapped their usual products for alternative ones, should they be able to obtain a similar product using a couponed discount.
People are also taking advantage of discounts offered when buying in bulk, with over a quarter doing so more often (26%). Overall, one in five (20%) have canceled a film and TV streaming subscription in an effort to save money on home entertainment.
8.) Curbing alcohol consumption, in an effort to save the dollars
Both at home and in restaurants, people are enjoying alcohol less frequently, as a result of inflation. Almost one in five people are spending less money on alcohol when dining out (19%) and 17% of people are spending less on all alcoholic beverages day to day. Over one in ten wine drinkers are buying less wine during their weekly grocery shops, in order to help curb their spending habits (12%).
9.) Holding onto older gadgets and appliances
Overall, one third of consumers have cut down on money they spend on gadgets and appliances (36%). Of those surveyed, one in five (21%) are using outdated gadgets, to avoid upgrading them and save on costs. One in six (15%) have taken to DIY in an attempt to fix faulty technology and avoid spending money on new gadgets and appliances.
When it comes to cell phones specifically, more than one quarter have avoided upgrading their cell phone model, to save money (28%). One in ten Americans (10%) have downgraded their cell phone package (eg, minutes, data), as they were offered a cheaper alternative.
10.) Changing up their credit card habits
The survey from Forbes Advisor found that over half of Americans have adjusted their credit card usage, in line with inflating costs of day to day living (50%). This amounts to more than one quarter of people being forced to use their credit card more often than previously (27%). Contrastingly, more than two fifths of Americans are being more careful to use their credit card less than they were previously (22%).