If you pay attention to the grocery stores, gas stations, or even take a look at your heating bill, one thing is clear— prices are getting higher. It implies that inflation is knocking, which is why necessary financial plans need to be strategized to face the situation. According to various surveys, the following observations have been noted:
- As the holiday season nears, about 88% of Americans are concerned about inflation.
- Many Americans are planning or have already planned to minimize spending, especially on eating, upgrading technology gadgets, traveling, and shopping for clothes.
- Experts advise on being a conscious consumer to address this situation and be financially viable to survive inflation.
- The increment in prices has seen many Americans suffering from sticker shock as this news was not expected.
In addition to these findings, a new survey from Country Financial indicated that as 88% of Americans were becoming concerned about inflation, it was more worrying as prices went to a new high in October.
The overwhelming increment was recorded by a 6.2% year-over-year change to the Consumer Price Index, a governmental tool that measures changes in prices. Although the signs of inflation were noted among the citizens, retail spending also rose faster than expected in October.
More research findings by Country Financial
The research conducted by Country Financial done between Oct. 22 and 25 found the following:
- In a population of 1,031 adults of 18 years and above,48% responded that they planned to reduce spending on food, specifically on restaurant meals and takeout, to tackle inflation.
- Another group, amounting to 30%, responded that they planned to forego upgrading their technological devices,29% opted for less clothing,20% went for canceling or postponing their travel plans, and 13% responded that inflation was to have less driving time.
Implications of Inflation
“The price increases are pretty pervasive, ” said Greg McBride, Chief Financial Analyst with Bankrate.
The slight increase in consumer spending with inflation in place is barely attributed to the rise in demand due to the availability of cash that Americans could hold on to while certain restrictions limited discretionary spending. Inflation implies that people tend to increase their spending as inflation rises.
When inflation hits, some customer habits include opting for purchases that can substitute for normal ones. For example, a consumer may buy ground beef instead of a more expensive steak. This situation may be different from the current situation due to the shortages experienced in products.
As the inflation curve is still upward, consumer spending will likely continue increasing because product prices will continue to rise. Therefore, beating higher prices or product shortages will inform these decisions.
Beating inflation by becoming a conscious consumer
- Experts advise consumers to make their holiday purchases to survive and adapt to these inflation implications, but that may imply that holiday shoppers may become in debt.
- A survey by CreditCards.com has noted that many people plan to spend the same as last year or even less during this holiday season.
- But with the rise in credit card purchases, the risk of going into debt or accumulating more balances is inevitable.
In other findings as researched by DebtHammer.org, the following statistics were noted:
- 78% of Americans have plans to set aside money for holiday spending,
- 58% indicated that their holiday spending was to be funded by a payday or other short-term loan.
- 66% responded that their strategy was to buy now pay later plan.
When it comes to an inflation period, consumers should be interested in devising an appropriate strategy as they go into the holiday season. This can only be addressed by being a conscious consumer with a vision of alleviating the financial situation during inflation times.
Consumers should look for ways to minimize their spending and adopt buying now to beat the expected price increase. As the experts debate the inflation timelines, historically, it should not last more than a year, but it won’t be a surprise seeing the situation spilling into a new year. For more tips on inflation and how it impacts your financial future, reach out to TetonPines Financials today.