Average Americans Dip Into $100 in Savings Monthly Due to Inflation

Photo of a young couple going through financial problems.
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Not only does a prolonged period of high inflation have significant consequences on a country’s economy, but it also affects people’s financial outlook and expectations in the short- and long-term.

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Of course, it also hits everyone in the bank balance, in for-real dollars. According to Bloomberg analyst estimates, the average U.S. household will need to budget an extra $5,200 this year due to excessive inflation.

Individually, a new study finds that in 2022, the average American adult is taking a little over $100 a month from their savings to compensate for the fastest cost of living increase in decades, reports Fortune.

According to the latest Wealth Watch survey conducted by New York Life Insurance Company, from January to the end of June, U.S. adults have taken out an average of $616.73 from their savings just to cover day-to-day expenses.  

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Although the overall outlook and confidence levels of those surveyed were indeed doleful, maybe the most concerning finding is the dip in their economic and financial optimism since the beginning of the year.

Results in the insurance company’s January study found that 69% of responders felt confident about meeting their financial goals. That percentage has slipped to 62% in the latest survey, just six months later.

“The financial picture for many Americans has changed significantly since the start of the year, and we’re seeing the positive expectations many Americans held about their finances heading into 2022 start to fade,” said Aaron Ball, senior vice president, head of Insurance Solutions, Service, and Marketing, New York Life.

“Three-quarters of those surveyed report that inflation has impacted either short- or long-term financial strategies, and nearly 9 in 10 adults (89%) are concerned about a potential economic recession in the U.S.,” he added.

Americans are making up for their higher expenses and waning optimism by cutting back on non-essentials such as eating out and ordering from restaurants (45%), traveling and going on vacation (39%) and attending events/nightlife (37%).

There were a few glimpses of optimism within the survey responses, however. Although “uncertain” and “anxious” were the two top responses when adults were asked how they feel about their finances (at 30% and 29% respectively), “hopeful” was a close third at 28%.

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Many of those surveyed reported minor victories. For example, 47% have made progress on putting some money away for retirement compared to 32% who haven’t. Sixty-four percent still feel confident that their retirement savings will last them their entire lives.

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In addition, 19% of respondents have been able to pay off debts, 18% have been able to afford a vacation and 17% have contributed to their savings or an emergency fund.

These are modest numbers to be sure, but in a country consumed by inflation, you look to the light when you can.

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About the Author

David Nadelle is a freelance editor and writer based in Ottawa, Canada. After working in the energy industry for 18 years, he decided to change careers in 2016 and concentrate full-time on all aspects of writing. He recently completed a technical communication diploma and holds previous university degrees in journalism, sociology and criminology. David has covered a wide variety of financial and lifestyle topics for numerous publications and has experience copywriting for the retail industry.
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