Yahoo Finance These Are the Top 3 Areas Americans Have Had To Curb Spending in the Last Year — How To Make Them More Affordable
According to an October survey from GOBankingRates, many Americans are feeling the effects of inflation. From rising costs at the grocery store and gas pump to housing affordability deteriorating, it’s getting expensive just to live.
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In response to rising costs, many Americans are cutting back on three main categories: food, entertainment and vacations. With the economy feeling shaky, Americans are trying to save money where they can.
Here’s a look at the details of how inflation has impacted American spending over the past year — and how to cut back on your spending without hating your life. Plus, GOBankingRates spoke to a few experts, who offered tips to save more money in each of these three spending areas.
How Inflation Is Affecting Personal Spending
In the survey, 75% of respondents said they had to change their spending and saving habits due to high inflation. This includes cutting back in different areas, including:
Housing
Entertainment
Food
Vacations
Retirement savings
Utilities
Most of the cost-cutting measures took place in spending on food (54% of respondents), entertainment (57%) and vacations (46%).
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These are three budget categories that are relatively easy to control, so it makes sense Americans are focused on cutting back here.
While food costs have risen quite a bit in recent years, there are measures you can take to reduce your overall food costs. Vacations and entertainment are optional expenses that you can cut back on in a pinch. As costs continue to rise, these expenses can be reduced drastically without affecting day-to-day life too much.
But instead of just cutting out these expenses, it’s better to plan for them a bit differently. GOBankingRates asked financial experts to weigh in on how to save money in these categories to help Americans save more but also still be able to enjoy some of these things.
Why Americans Are Cutting Back on Food Spending
According to the USDA, food inflation is hitting Americans hard. In 2022 alone, food prices increased by nearly 10%. And the “food-at-home” costs were up by nearly 12% in 2022. This massive increase in costs makes it much more expensive to feed your family.
In 2023, the “food-away-from-home” costs have increased 6% over the past 12 months. This makes eating out at restaurants much more expensive, as well. Overall, food costs make up a large portion of many family budgets, and Americans are feeling the squeeze.
Why Americans Are Cutting Back on Entertainment Spending
Entertainment costs include movie theaters, theme parks and subscription services. While there are many free ways to get outside and enjoy yourself, entertainment continues to get more and more expensive.
For example, many subscription services are increasing prices, with Netflix and Disney Plus leading the way. And if you sign up for a handful of streaming services, you may be paying up to $100 per month, which is now back to the price of your monthly cable bill.
And Disney theme parks and other entertainment options continue to raise prices as well, causing Americans to take 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 day-to-day life and relax a bit. But the costs of travel have increased drastically. According to U.S. Travel’s Travel Price Index, costs have gone up by nearly 4.5% since last year and over 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 it more manageable.
Expert Tips: How To Save Money on Food Spending
GOBankingRates consulted a few financial experts for their best tips on saving money on food costs. Here’s what they shared:
“If you have the space, purchasing frozen meats, fruits and veggies in bulk can be a great way to save,” said Bri Conn, co-host of the Childfree Wealth Podcast. “Pay attention to the price per ounce or pound. Not everything in bulk is a deal. You can also look for a local farmer or rancher to purchase meat from. This will be more expensive up front, but if you have the cash, it can be cheaper over time.”
“Saving on food expenses involves strategic meal planning, buying in bulk and opting for budget-friendly options,” said Jorge Sanchez, partner at Physician on FIRE. “Utilize coupons, generic brands and discounts while preparing meals at home to cut down dining-out costs.”
“If you’re trying to cut your grocery bills, take meal planning to the next level by designing your menu around your local grocery store’s weekly circular,” 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 fight off boredom, but it shouldn’t break the bank. Here’s a few ways to save money and still be entertained:
“In terms of entertainment, focus on free or low-cost activities, such as hiking, exploring local parks or attending community events,” said Sanchez. “Seek discounts on tickets, matinee showings or use memberships for reduced prices at cultural venues.”
“When it comes to entertainment costs, consider subscription bundling,” said Chris McGuire, founder of Real Estate Exam Ninja. “Many streaming platforms offer discounted rates when you bundle multiple services together. Evaluate your subscriptions and opt for the most cost-effective package.”
“Take advantage of free events and activities in your community, such as outdoor concerts, art exhibitions or local festivals,” McGuire added. “Public libraries often host free workshops, book clubs and movie nights. DIY projects and hobbies can be both entertaining and budget-friendly. Whether crafting, 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. With travel costs going crazy, here’s a few ways to save on vacation, according to experts:
“If you’re looking 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 out-of-pocket costs,” said Conn. “Finding vacation spots close to home can also be a great way to save.”
“For saving on vacations, consider off-peak travel seasons, book in advance for better rates and explore alternatives like camping or house rentals instead of costly hotels,” said Sanchez. “Research package deals and utilize travel rewards to lower overall expenses while remaining flexible with travel dates for the best deals.”
Bottom Line
Yes, inflation is real, and the costs of living continue to go up and up. And while the Federal Reserve is trying to bring inflation down, the increased costs are here to stay. Being mindful of 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 and enjoy yourself at the same time.
GOBankingRates surveyed 1,021 Americans aged 18 and older from across the country between Oct. 12 and Oct. 16, 2023, asking twenty-three different questions: (1) How much did you spend on your pet in the last year?; (2) How much have you spent/are you planning to spend on Halloween this year?; (3) How much money do you spend on kid-related activities in a year?; (4) How much do you spend on average on your monthly utility bills (electric, heat/gas, water)?; (5) What spending/saving habits have you had to change in the last year due to inflation/rising prices? (select all that apply); (6) What was the biggest unexpected expense you had this year?; (7) How much do you currently spend on monthly car payments?; (8) Do you live in a single-income or dual-income household?; (9) In the past year, did you have to take on a side gig because of rising prices/inflation?; (10) How much do you bring home from your side job(s) each month?; (11) How much have your overall expenses gone up in the past year?; (12) What is your top financial priorities to end 2023?; (13) What is the top way you’ve earned your money/gained wealth?; (14) Have you started financially preparing for 2024?; (15) How much have you spent on home upgrades in 2023?; (16) How will the resumption of student loan repayments 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.) out of each paycheck?; (19) How much do you spend on online purchases per month?; (20) Where do you shop for groceries most often?; (21) Do you shop around for groceries to get better deals?; (22) What are you currently invested in? (Select all that apply); and (23) What is the current value of your stock investments?. GOBankingRates used PureSpectrum’s survey platform to conduct the poll.
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This article originally appeared on GOBankingRates.com: These Are the Top 3 Areas Americans Have Had To Curb Spending in the Last Year — How To Make Them More Affordable
