Many Americans are feeling the effects of inflation, according to an October survey by GOBankingRates. From rising costs at the grocery store and gas pump to worsening housing affordability, it’s it’s getting expensive just to live.
Discover: 11 habits of frugal people to apply every time you go shopping
Discover: How to get cash back on your everyday purchases
In response to rising costs, many Americans are cutting spending in three main categories: food, entertainment and vacations. With the economy looking fragile, Americans are trying to save money where they can.
Here’s a detailed look at the impact of inflation on U.S. spending over the past year — and how to reduce your expenses without hating your life. Plus, GOBankingRates spoke with a few experts, who offered tips for saving more money in each of these three spending areas.
How Inflation Affects Personal Spending
In the survey, 75% of respondents said they had to change their spending and saving habits due to high inflation. This includes discounts in different areas, including:
- Accommodation
- Entertainment
- Food
- Holidays
- Pension saving
- Utilities
Most cost-cutting measures involved spending on food (54% of respondents), entertainment (57%) and vacations (46%).
Growing up in poverty: 13 Ways You’re Taught to Never Waste Money
These are three budget categories that are relatively easy to control. It is therefore logical that the Americans focus on reductions in this area.
Although food costs have increased significantly in recent years, there are steps you can take to reduce your overall food costs. Vacations and entertainment are optional expenses that you can cut back in a pinch. As costs continue to rise, these expenses can be significantly reduced without affecting daily life too much.
But instead of just cutting out these expenses, it’s better to plan them a little differently. GOBankingRates asked financial experts for their opinions on how to save money in these categories to help Americans save more while still enjoying some of these things.
Why Americans are cutting back on food spending
According to USDA, food inflation is hitting Americans hard. In 2022 alone, food prices have increased by almost 10%. And “food at home” costs have increased by almost 12% in 2022. This massive increase in costs makes it much more expensive to feed your family.
In 2023, “out-of-home catering” costs have increased by 6% over the past 12 months. It also makes dining out much more expensive. Overall, food costs represent a significant portion of many families’ budgets, and Americans are feeling the strain.
Why Americans are cutting back on entertainment spending
Entertainment costs include movie theaters, theme parks and subscription services. Although there are many free ways to go out and have fun, entertainment continues to become more and more expensive.
For example, many subscription services are raising their prices, with Netflix and Disney Plus leading the way. And if you sign up for a handful of streaming services, you might pay as much as $100 a month, which is now the price of your monthly cable bill.
And Disney theme parks and other entertainment options also continue to raise prices, causing Americans to pause and think twice before booking a day at a theme park.
Why Americans are cutting back on vacation spending
Vacations are a great way to get away from everyday life and relax a little. But travel costs have increased significantly. According to US Travel Travel Price Indexcosts have increased by almost 4.5% since last year and more than 20% since 2019.
This massive increase in travel costs is causing many Americans to consider avoiding vacations altogether — or at least cutting costs to make them more manageable.
Expert Tips: How to Save Money on Food Spending
GOBankingRates consulted a few financial experts to get their best tips for saving money on food costs. Here’s what they shared:
“If you have space, buying frozen meats, fruits and vegetables in bulk can be a great way to save,” said Bri Conn, co-host of the show. Wealth Without Kids Podcast. “Pay attention to the price per ounce or per pound. Basically everything is not a good deal. You can also find a local farmer or rancher to purchase meat from. It will cost more initially, but if you have the money, it may cost less over time.
“Saving on food expenses involves strategic meal planning, buying in bulk and choosing budget-friendly options,” said Jorge Sanchez, partner at Doctor in FIRE. “Use coupons, generic brands, and discounts when preparing meals at home to reduce restaurant dining costs.”
“If you’re trying to reduce your grocery bills, take meal planning to the next level by designing your menu around your local grocery store’s weekly flyer,” said Jake Hill, founder of debt hammer. “Not only will this strategy maximize your savings, but it will also force you to think creatively about your week’s meals.”
Expert Tips: How to Save Money on Entertainment Spending
Entertainment is essential to combat boredom, but it doesn’t have to break the bank. Here are some ways to save money while having fun:
“In terms of entertainment, focus on free or low-cost activities, like hiking, exploring local parks or attending community events,” Sanchez said. “Look for discounts on tickets, matinee screenings, or use memberships to receive discounted prices at cultural venues.”
“When it comes to entertainment costs, consider subscription bundling,” said Chris McGuire, founder of Real Estate Review Ninja. “Many streaming platforms offer discounted prices when you bundle multiple services. Evaluate your subscriptions and opt for the most cost-effective plan.
“Take advantage of free events and activities in your community, like outdoor concerts, art exhibits or local festivals,” McGuire added. “Public libraries often host free workshops, book clubs and movie nights. DIY projects and hobbies can be both fun and economical. Whether it’s DIY, gardening, or learning a musical instrument, these activities can provide hours of entertainment without breaking the bank.
Expert Tips: How to Save Money on Vacation Spending
Vacation is optional, but sometimes you just need to get away. As travel costs get crazy, here are some ways to save on vacation, according to experts:
“If you’re planning to go on vacation and have accumulated credit card points – remember to pay your bill in full each month, otherwise the points aren’t worth it – use them to reduce your personal expenses,” Connecticut said “Finding vacation spots close to home can also be a great way to save money. »
“To save on vacations, consider off-peak travel seasons, book in advance to get better rates, and explore alternatives like camping or renting homes rather than expensive hotels,” Sanchez said. “Research packages and use travel rewards to reduce overall spending while remaining flexible on travel dates to get the best deals.” »
Conclusion
Yes, inflation is real and the cost of living continues to rise. And while the Federal Reserve attempts to reduce inflation, rising costs are here to stay. Being careful with your spending is always a good idea, but you can still enjoy things like streaming services, vacations, and good food without hurting your wallet too much. With strategic planning and flexibility, you can save money while having fun.
GOBankingRates surveyed 1,021 Americans ages 18 and older across the country between October 12 and 16, 2023, asking twenty-three different questions: (1) How much have you spent on your pet over the past year? last year ? ; (2) How much did you spend/plan to spend on Halloween this year? ; (3) How much money do you spend each year on child-related activities? ; (4) How much do you spend on average on your monthly utility bills (electricity, heating/gas, water)? ; (5) What spending/saving habits have you had to change over the past year due to inflation/rising prices? (Select all that relates to it); (6) What was the biggest unexpected expense you had this year? ; (7) How much are you currently spending on monthly car payments? ; (8) Do you live in a single-income or two-income household? ; (9) In the past year, have you had to take on a side job due to rising prices/inflation? ; (10) How much do you bring in from your side job(s) each month? ; (11) How much have your overall expenses increased over the past year? ; (12) What are your top financial priorities to end 2023? ; (13) What is the main way you earned your money/acquired wealth? ; (14) Have you started financially preparing for 2024? (15) How much did you spend on renovating your home in 2023? ; (16) How will resuming student loan payments affect your budget?; (17) How much do you currently owe in student loans? ; (18) How much do you spend on yourself (not including housing, food, etc.) from each salary? ; (19) How much do you spend on online shopping per month? ; (20) Where do you shop most often? ; (21) Do you shop around for better deals? ; (22) What are you currently investing in? (Select all that relates to it); and (23) What is the current value of your stock investments?. GOBankingRates used PureSpectrum’s survey platform to conduct the poll.
More from GOBankingRates
This article was originally published on GOBankingRates.com: These are the top 3 areas where Americans have had to cut spending over the past year – how to make it more affordable
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.