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Many Americans Aren’t Optimistic About Their Finances and Here Are Some of the Reasons

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A Bankrate survey last year revealed that about two-thirds of Americans were pessimistic about their finances improving during this year. More than half of the respondents blamed inflation as a major factor affecting their finances and rightfully so. In fact, prices are rising so fast that many people are getting concerned about their financial futures.

Inflation began last year in November surging 6.8% from a year ago. It should be noted that this is the fastest prices have risen since 1982 according to the Department of Labor. This year, it looks as if people will be paying more for everything from food, health care costs to the gas they use for their everyday commute.

To break it down for you, energy costs have risen 33.3% and shelter as outlined in the CPI has risen 3.8% which is the highest since 2007. in the meantime, food prices have risen 6.1%. factoring all these increases, if you keep a budget, it will be disrupted quite significantly. If you have a mortgage or maybe pay any sort of debt or just trying to save, the rise in prices will be a much obstacle to your progress.

To that end, about 26% of Americans believe that their financial footing will be much worse this year and of those, 70% believe that inflation is the biggest barrier to their success.

About 42% believe that their financial life will remain uninterrupted, with 44% of those respondents claiming inflation as the reason for the stagnation.

But, for how long can we live with inflation?

Well, not long! The Fed has on several occasions hinted that inflation will be temporary as it is being driven by covid-19 supply chain and demand issues. Additionally, the Central Bank December announced a series of moves to combat the rising prices. Part of its plan is to reduce the monthly bond purchases and then start raising the interest rates which is expected to begin in late winter or early spring. When the Central Bank raises the interest rates, it does so to slow the economy and also bring inflation down.

Many people need to start tracking down their spending and looking for ways and opportunities to take full advantage of sales, coupons, and customer loyalty programs.

 

Sources:

https://www.cnbc.com/2022/01/03/many-americans-are-worried-about-their-finances-amid-rising-inflation.html

https://www.msn.com/en-us/money/markets/new-survey-shows-americans-worried-about-2022-finances/ar-AASh1gH

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