About one-quarter of U.S. households said they have tapped their savings to pay for a basic expense like groceries or rent amid painfully high inflation.
More than half of the respondents – about 54% – who tapped their savings said they did so in order to pay for basic expenses like groceries and rent.
"Inflation has shredded household budgets over the past two years, and not just when it comes to one-off discretionary expenses or special occasions, but for keeping up with day-to-day bills," said Greg McBride, chief financial analyst at Bankrate.com.Millions of Americans stashed away extra cash during the pandemic as a result of multiple stimulus checks, boosted unemployment benefits and limited spending options, but those savings are quickly dwindling.
The data comes as Americans continue to confront the hottest inflation since the 1980s. The Labor Department reported this week that therose 0.5% in January – faster than expected – and is up 6.4% over the past 12 months. While that is down from a peak of 9.1% recorded over the summer, it remains about three times higher than the pre-pandemic average. Consumers are increasingly relying on their savings andin order to pay for necessities. The personal savings rate tumbled in December to 3.
In the last three months of 2022, credit card balances increased by $61 billion to $986 billion, according to the New York Federal Reserve Bank's
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