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Inflation forces Americans to postpone retirement, home buying, college, vacations and more: Nationwide

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Consumers are revising their future financial plans due to high inflation, according to a new Nationwide survey. (iStock)

Inflation hit a new 40-year high in March, rising 8.5% a year, according to consumer price index (CPI). Not only are consumers spending significantly more money on groceries and gas pumps than at the same time last year, but rising inflation has also driven up the cost of living for various basic expenses like utilities, rent and transportation.

of worry, a new investigation from Nationwide suggests that soaring prices for consumer goods are causing many Americans to postpone financial milestones such as retiring, buying a home and going to college.

But consumers aren’t just changing their future financial plans. They are also changing their current spending habits by making food at home, driving less and seeking better paying jobs, the survey found. Additionally, many Americans are increasingly reliant on credit cards to cover necessary expenses.

Keep reading to learn more about how US consumers are adjusting to higher prices. And if you’re one of the many Americans who rely more on credit card spending, you might be able to save some money by consolidating your debt into a personal loan. You can learn more about credit card consolidation and compare offers by visiting Credible.

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Many consumers are postponing or canceling financial milestones amid inflation

As inflation drives up the cost of living, many Americans polled by Nationwide are taking a second look at their future financial plans.

About two in five respondents (41%) said inflation had caused them to postpone or cancel vacations, or at least consider changing their plans. Almost as many (37%) have decided to reassess their car purchase plans at a time when prices for new vehicles are at an all-time high. And a quarter of buyers are expecting this year’s competitive housing market due to inflation.

Life plans canceled or postponed due to inflation

More than a fifth of consumers (21%) said they were considering postponing or canceling plans to start school – half of them have already decided to do so. About the same number (20%) said they might postpone or cancel their retirement plans due to inflation. Americans also reconsidered plans to move (23%), start a family (18%) and get married (16%).

Additionally, many survey respondents said they are changing their current spending habits to offset rising consumer prices. Almost half (48%) said they eat out less often, while around a quarter (24%) plan to do so. More than a third (35%) have started driving less and a further 24% plan to reduce their time behind the wheel.

Alarmingly, more than a fifth of Americans (21%) are relying more on credit cards due to inflation, and 16% plan to increase their credit card spending. Adding to your credit card debt without paying the statement balance can result in hundreds or thousands of dollars in interest charges over time.

If you’re looking for ways to pay off high-interest credit card debt, you might consider consolidating it into a fixed-rate personal loan. This can help you lower your monthly payments and get out of it faster. You can visit Credible to compare debt consolidation loan rates for free without impacting your credit score.

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90% are concerned about inflation, 64% say the Fed should do more

The vast majority of Americans polled by Nationwide are either very concerned (56%) or somewhat concerned (34%) about soaring inflation. Only 9% said they were not concerned about rising consumer prices.

About two-thirds (64%) of survey respondents said the Federal Reserve should be doing more to fight inflation, while 12% think it should be doing less. The current inflation rate of 8.5% is well above the central bank’s 2% target. Fed Chairman Jerome Powell has previously indicated that several rate hikes throughout 2022 may be needed to offset rising consumer prices.

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Raising the benchmark rate is one of the Fed’s primary inflation-control tools, but higher rates come with a number of downsides for consumers. In fact, central bank monetary policy has already had a significant financial impact.

Mortgage rates soared to almost 5% in April, according to Freddie Mac. These are the highest mortgage interest rates since 2018, driving up the cost of borrowing for potential buyers.

Rate increases may also impact consumers who have variable rate debt, such as revolving credit card balances. Recent rate increases will likely result in higher variable APRs for credit cards, which may result in higher monthly payments for credit card users.

If you’re struggling to manage your credit card debt in an environment of inflation and rising interest rates, you might want to consider debt consolidation. This financial strategy consists of paying off your credit card balances with a fixed rate personal loan, which means that your interest rate and your monthly payment will remain the same for the duration of the repayment.

You can compare current personal loan rates in the table below. Then you can use Credible’s personal loan calculator to determine if credit card consolidation is the right decision for your financial situation.

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