Inflation Leading Americans to Change their Lifestyles to Offset Rising Costs

Young Americans Adversely Affected with 60% Reducing Saving Contributions

The author(s)

  • Sean Simpson SVP, Canada, Public Affairs
  • Haley Jones Account Manager, Ipsos Public Affairs
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Washington, DC, May 31st, 2022 —The latest BMO Real Financial Progress Index finds that inflation and rising consumer costs are severely impacting Americans. Nearly six in ten (58%) Americans say inflation has adversely impacted their personal finances, of which 24% say that they have felt a major impact.

Reflecting on the impact inflation can have, 36% of Americans have reduced their savings and 21% have reduced their retirement savings. When asked about the impact of rising consumer costs, a quarter (25%) of Americans will need to delay their retirement. Younger Americans are feeling the most impact – 66% of those aged 25-34 said they will reduce contributions to their savings. What is it that Americans save for that they’re now considering sacrificing? Retirement savings (59%) tops the list of financial goals, followed by vacation (44%) and paying down debt (40%).

Eight in ten (80%) Americans say they are making lifestyle changes to help offset the increased cost of living.

  • 42% of Americans are changing how they shop for groceries (higher among women: 47% vs. 36% men)
  • 46% are either dining out less or consciously spending less when dining out (higher among women: 49% vs. 43% for men)
  • 31% are driving less to offset the soaring cost of gas
  • 23% are spending less on vacations or canceling them altogether
  • 22% are canceling subscription based goods and services such as the gym, cable, etc (higher among women: 25% vs. 20% of men)

In addition to planning lifestyle changes to manage rising costs, the data shows that Americans are putting increased effort into planning their finances. More Americans are setting yearly budgets (42%, +3 pts), writing their financial plans (37%, +4 pts), and acquiring professional financial advisors (36%, +6 pts),while three quarters (74%) continue to set financial goals.

More Americans may be seeking professional financial support: when asked who is most important in helping reach financial goals 55% (+5 pts) said their bankers were crucial and 52% (+6 pts) said their investment company financial advisors were important.

In seeking professional financial help, Americans may be looking to address what they perceive to be the barriers to making financial progress, the top three of which are uncertainty about the future (29%), monthly bills (29%), and housing costs (26%). While these “big picture” challenges are certainly a factor, behavioural change may also be needed for Americans to get ahead financially: 51% admit that they often spend more than they know they should, a figure that may be leading to 31% stating they do not have enough money to get through an unexpected emergency. The data shows that Americans have many financial concerns on their mind with the top source of financial anxiety for Americans is an unknown expense that may come up (47%), followed by anxieties about COVID-19 (40%) and one’s overall financial situation (42%).

Despite continuing inflation, the survey shows there are some silver linings. 47% (+1 pt) of Americans agree they’re making real financial progress today, 47% say they are more financially secure than they were a year ago (higher among millennials 65%), and the data shows a slight increase in financial confidence (78%, +3pts).

About the Study

These are the findings from an Ipsos poll conducted from March 30 to April 25, 2022 on behalf of BMO Harris Bank. For the survey, a sample of 3,407 adults ages 18 and over from the continental U.S., Alaska and Hawaii was interviewed online in English (including n=300 oversamples in Chicago, Indianapolis and n=303 in Milwaukee). The sample for this study was randomly drawn from Ipsos’ online panel (see link for more info on “Access Panels and Recruitment”), partner online panel sources, and “river” sampling (see link for more info on the Ipsos “Ampario Overview” sample method) and does not rely on a population frame in the traditional sense. Ipsos uses fixed sample targets, unique to each study, in drawing a sample. After a sample has been obtained from the Ipsos panel, Ipsos calibrates respondent characteristics to be representative of the U.S. Population using standard procedures such as raking-ratio adjustments. The source of these population targets is U.S. Census 2018 American Community Survey data. The sample drawn for this study reflects fixed sample targets on demographics. Posthoc weights were made to the population characteristics on gender, age, race/ethnicity, and region. Statistical margins of error are not applicable to online non-probability polls. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error and measurement error. Where figures do not sum to 100, this is due to the effects of rounding. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll has a credibility interval of plus or minus 2.5 percentage points for all respondents.

For more information on this news release, please contact:

Sean Simpson
Senior Vice President, Ipsos Public Affairs
[email protected]

Haley Jones
Senior Account Manager, Ipsos Public Affairs
[email protected]

About Ipsos

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The author(s)

  • Sean Simpson SVP, Canada, Public Affairs
  • Haley Jones Account Manager, Ipsos Public Affairs

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