How Four Households Are Tackling Inflation – Kiplinger’s Personal Finance

Americans have survived a few brushes with economic uncertainty over the past few years. In 2019, roughly 800,000 federal employees and contractors were furloughed for a little over a month, leaving many scrambling to cover bills. In 2020, the COVID-19 pandemic briefly stalled the economy, forcing some businesses to close and lay off their employees. But those disruptions didn’t prepare families for the financial pain wreaked by the steep rise in the prices for everything from gas to groceries. 

The cost of goods and services rose 9.1% in June—a 40-year high—and Kiplinger forecasts that the inflation rate will end the year at 8% to 9%. There’s no sign it will return to normal anytime soon, which has heightened financial anxiety for millions of families.  

Overall, Americans are reducing their spending, and some are looking for extra income. Two-thirds of respondents surveyed by CIT Bank said they were cutting back on spending, and 38% said they’re postponing major purchases. In addition, 85% said inflation is making it harder for them to save. The bear market, which is caused at least in part by the Federal Reserve’s inflation-fighting stance, is also putting pressure on American households.

To keep their heads above water, some Americans are turning to side gigs for extra income. Others are driving less or cutting back on summer vacation plans. Still others have enough in savings to tough it out. But even those who are financially above water are rearranging some aspects of their daily lives.

1 of 5

The Jones: Asking Teenage Daughters to Chip In

Like many American families, Krista and Dave Jones, who live in Cincinnati, are using coupons at the grocery store, taking advantage of grocery store fuel points to lower the cost of gas, and driving less in general. Both Krista, 47, and Dave, 50, work from home most of the week, so it’s easier to drive less. Although they don’t go through every purchase in their bank and credit card statements, they review the trend lines in each report. That has led them to scale back on restaurant and takeout meals, and they’ve loaded up on items such as shampoo and toothpaste when they go on sale. The biggest item the Joneses eliminated this summer was their gym membership, which cost several hundred dollars a year. 

The Joneses have two daughters—Madeline, 18, and Kayla, 14. Madeline will attend the University of Cincinnati this fall, and they plan to ask their auto insurer for a policy discount, as Madeline’s car will remain mostly stationary. “We’ve always been conservative in our spending, so inflation isn’t hitting …….

Source: https://www.kiplinger.com/how-households-are-tackling-inflation

Leave a Reply

Your email address will not be published.