A new report has found that inflation is taking a toll on Americans, forcing a majority of middle-class households to dip into their savings just to stay afloat.
The report comes from the financial services company Primerica, which surveyed those in the middle class to see how the 40-year high inflation is affecting them. Respondents to the poll were asked about their financial situation and came from households earning $30,000 to $100,000 annually.
In the last three months of 2022, 82% of households surveyed reported having to either cut down on the amount of money they’re putting into their savings or that they were reaching into existing savings to make up for where their paychecks fell short.
One of the authors of the report, Amy Crews Cutts, shared in a statement that while inflation has been punishing for everyone, “middle-income American families” are especially feeling the heat.
“With prices increasing at the fastest rate in a generation, the middle-market is now spending their savings to make ends meet. Even so, most middle-income households are optimistic about their future and show remarkable resilience in the face of economic headwinds,” the Primerica economic advisor shared in the statement.
The Primerica report analyzed the Consumer Price Index, looking at monthly prices for food, gas, and utilities. It found that the CPI in those categories, considered to be essential, has risen by 10.7% compared to 7.1% for the broader category, which also includes non-essential purchases.
Respondents are planning on responding to the increased prices by cutting their spending partially or entirely for the next few months, the report shared. The survey also shared that 39% of middle-income households have already started taking steps to reduce spending last year.
Wages have increased throughout the last year, jumping 1.4% in the first quarter of 2022, but Primerica highlighted that even with it being the biggest jump since 2001, it was not enough to offset the impacts of inflation.
With almost 75% of the households surveyed saying they are waiting to buy non-essential items, another 47% said they were also putting off repairs and maintenance for their cars and homes.
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“Families are well aware of the potential economic risks in the year ahead and are proactively taking steps to reduce the impact on their financial future,” Peter W. Schneider, Primerica’s president, said in a release.
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