Are you shocked by stickers when paying for everyday goods and services, from a burger to a haircut to a new couch?
Nearly nine in 10 American adults (89%) say they have paid higher prices this year.
A July 2021 survey of 2,420 American adults, conducted by YouGov for Bankrate, found that many Americans say recent price hikes have hit their wallets hard and older consumers have felt the pressure more than older consumers. youth.
The consumer price index rose 0.8% in February from January, pushed by sharp increases in energy and food costs, according to the Bureau of Labor Statistics report released Thursday.
The February gain would result in a 7.9% rise in inflation for the year, which is the highest in 40 years, since the 12 months ending in January 1982.
Here are the top three categories in which consumers reported higher prices:
n Grocery (71%)
n Gas (67%)
n Restaurants (46%)
The survey also revealed higher prices on consumer goods such as clothing, furniture and electronics (35%), as well as home services such as construction, house cleaning and cleaning. landscaping (26%).
Additionally, travel expenses such as airfare, hotels, and car rental (26%) and personal care services such as salons and gyms (21%).
Prices are rising due to a combination of factors, including changes in consumer behavior, supply chain issues and shortages of certain raw materials, says Ryan Sweet, U.S. economist at Moody’s Analytics.
“Almost all of this can be attributed to the pandemic,” Sweet says.
Are the prices soaring? Depends who you ask
A July 2021 Bureau of Labor Statistics report shows prices have jumped on nearly everything from bacon to dog food to underwear. Overall, consumer prices have risen 5.4 percent over the past year, according to the BLS.
But the Bankrate survey found that price increases weren’t for everyone, and older consumers were more likely to report price increases.
Here is a generational breakdown of consumers who reported higher prices:
n 95% of baby boomers (aged 57-75)
n 92% of Gen Xers (aged 41-56)
n 84% of millennials (25 to 40 years old)
n 75% of Gen Zers (18-24)
These differences apply in various categories of expenses, starting with the purchase of ingredients for dinner.
About half as many Gen Zers (40%) as Gen Xers (79%) reported an increase in grocery prices. Among baby boomers, the number was even higher: 89%.
When it comes to the cost of refueling a car, only 45% of Gen Zers said they pay more at the pump, compared to 53% of Millennials, 70% of Gen Xers and 81% of baby boomers.
When it comes to dining out, more than half of baby boomers (56%) and Gen Xers (53%) said the cost of dining out has increased, compared to about one in three of the generation. Y (34%) and Generation Z (31%).
This data shows that some consumers are noticing price increases more than others, says Bankrate industry analyst Ted Rossman.
“Price increases have been well documented across all of these categories, so I think most of the variability can be attributed to perception,” he says.
Consumers of all age groups who have noticed higher prices say that these increases are hurting their financial situation.
In fact, two out of three consumers who saw their prices go up (66%) said higher costs had a negative impact on their finances.
Of this group, 39% said their finances had been somewhat negatively affected and 27% said their finances had been very negatively affected.
Millennial Alina Clark, 36, of Los Angeles, says her costs for using Uber and Lyft to get to work have tripled since before the pandemic. She went back to work in person three months ago and paid $150 in a single day for carpooling.
“My personal transport budget has been completely destroyed by these prices,” she says, adding that she has had to cut spending in other areas and is considering buying a car even though she hates driving in bad weather. time and in traffic.
Rising prices seem to be hitting middle-income households particularly hard.
The survey found that these percentages of households at different income levels reported negative impacts from higher prices:
n 64% of low-income households (less than $40,000)
n 71% of middle-income households ($40,000 to $79,999)
n 58% of high-income households ($80,000 and over)
And the negative financial impacts of price increases also increase with age.
In the Bankrate survey, 75% of Baby Boomers and 70% of Gen Xers who noticed higher prices reported negative effects on their financial situation.
But just over half of younger generations (55% of Millennials and 54% of Gen Z) said rising prices had hurt them financially.
One consumer, Patti Naiser, a senior resident counselor in Louisville, Kentucky, who is in her 50s, says rising utility bills have hit her budget hard. She makes up for it by buying local produce, forgoing imported foods like olives and goat cheese, and cutting back on restaurant meals. “I can’t afford to eat out at restaurants so often as it put a huge dent in my pocket,” she says.
Having to pay more for everyday items hits older generations harder for a variety of reasons, Rossman says. “Price hikes are especially painful for baby boomers trying to make their savings last,” he says. Also, he points out, older people are likely to be more conservatively invested and may be in retirement.
“Younger, employed adults are in a better position to deal with rising costs, as their wages are also expected to rise,” Rossman said. “And they can afford to take on more risk because their investments have a much longer time horizon.”
Consumers are taking steps to cope with the difficulties of rising prices and improve their budget, according to the survey.
About four in five consumers (79%) who said they paid higher prices took action to deal with these higher costs. The poll found that Americans reported adjusting their financial strategy in these ways:
n Avoiding or delaying certain purchases (45%)
n Reduce in certain areas to afford purchases (47%)
n Make an effort to research in-store deals and sales (38%)
n Draw on savings (22%)
n Try to increase income (19%).
Trying to make more money was a popular move for young consumers, many of whom may consider side hustles the norm. About one in three of the younger generations who report paying higher prices (34% of Gen Z and 30% of Millennials) have actively tried to increase their income, compared to one in five of Gen X (19 %) and one in 10. baby boomers (10%).
Some Americans have turned to credit cards to cover the shortfall. In fact, 20% of consumers said they had accumulated more debt due to rising prices. This includes credit card debt and loans from friends or family members.
And consumers who withdraw more of their credit card also experience another type of price increase: credit card surcharges. The survey found that nearly one in five American adults (19%) have paid extra for using a credit card this year.
When you put a budget deficit on a credit card, you’re setting yourself up for financial insecurity, says Shaquana Watson-Harkness. A Gen Xer and personal finance coach in the Philadelphia area (at dollarsmakescents.com), Watson-Harkness paid off $169,000 in consumer debt.
“Every time you put a charge on this card, you put yourself in the negative,” she says.
How to deal with higher prices
The prices of goods and services may soon stop skyrocketing. In the meantime, it’s wise to take steps to prevent higher costs from leaving you with a credit card charge.
Here are 4 tips for surviving higher prices:
Set (or modify) a budget. If you already have a budget, take a look at what’s changed over the past few months and see if you need to adjust. If you don’t have a budget, use a free budget template or an app like EveryDollar or Mint to create one, says Watson-Harkness. “You have to be intentional about where your money goes,” she says.
Compare the prices. If you’ve never been a comparison shopper, now might be the time to start. In Lincoln, Nebraska, Jessica Clark, a 35-year-old mom and recipe creator at GlutenFreeSupper.com, used to shop at one store, but now does three or four. She gets gluten-free frozen pizza for $5 at ALDI, half the price she paid elsewhere, but eggs are cheaper at Target. “It’s time-consuming to do comparison shopping across multiple stores, but it’s worth it for the savings,” she says.
Increase your earnings. As the pandemic continues, labor shortages have hit many businesses hard. If it’s feasible and safe for you, consider finding a way to supplement your income through a part-time job or side job, such as doing landscaping, pet sitting, or independent writing. Check out these tips for starting a side hustle to earn some extra cash.
Wait if you can. Planning a big purchase or a well-deserved vacation? Maybe you want to buy a new Subaru or go to Hawaii. Ask yourself if a tune-up and a stay would be enough for you for now and allow you to postpone the purchase or the trip.
Going forward, we should see prices start to moderate late this year and early next year, Sweet says. Used car prices have already started down that path, and he says he expects to see the cost of airfare, accommodation and rental cars start to follow soon.
“The good news is that it’s temporary,” he says. “We are not going to continue to see the rate of inflation that we have seen over the past few months.”
Bankrate.com commissioned YouGov to conduct the online survey. All figures, unless otherwise stated, are from YouGov Plc. The total sample size was 2,420 adults. Fieldwork was undertaken July 28-30, 2021.
(Visit Bankrate online at bankrate.com.)
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