Americans Struggle to Make Ends Meet as Inflation Takes Its Toll

Americans Struggle to Make Ends Meet as Inflation Takes Its Toll
(Illustration by The Epoch Times, Getty Images, Madalina Vasiliu/The Epoch Times, Chung I Ho/The Epoch Times)
May 18, 2024
May 23, 2024

Monica Lomax, a 59-year-old resident of Elkridge, Maryland, has been feeling the pinch of rising costs.

She’s had to tighten her budget, especially for groceries and clothing. Now, her shopping trips are primarily for essentials, a necessary adjustment in her life to manage the financial squeeze.

“I was thinking about purchasing or downsizing into another home. But because the interest rates are still high, I’ve put that off,” she told The Epoch Times.

Many Americans like Ms. Lomax are putting off major life plans due to high inflation. Moving to a new home, buying new furniture, or booking a vacation now seem like distant dreams.

While some cling to the hope that things will eventually go back to normal, others fear that high inflation is here to stay.

Susan Garland, 47, from Elkridge, Maryland, believes inflation remains one of the top issues facing the country.

“We are definitely feeling it. We’re a two-person family. Our grocery bill is now over $100 a week,” she told The Epoch Times.

For more than 10 years, the Garlands’ grocery bills used to be roughly $70 per week—before high inflation hit, she noted. She and her husband have had to cut back on spending on everything, from vacations to eating out.

Her husband, plumber Michael Garland, 53, says homeowners are also reducing their spending on services, which has a direct impact on his income.

“If they can’t afford services, they won’t call me, which affects my job,” he said.

Plumber Michael Garland, 53, and Susan Garland, 47, a medical coding expert, after voting in the primary election in Elkridge, Md., on May 14, 2024. (Madalina Vasiliu/The Epoch Times)

Dipping Into Retirement

Adding to the financial woes, an increasing number of Americans are being forced to tap into their 401(k) savings early to cover emergencies and basic expenses.
Internal data from investment firm The Vanguard Group revealed that 3.6 percent of its participants made a “hardship withdrawal” last year, up from 2.8 percent in 2022.

This issue is particularly serious for retirees, as they face the risk of depleting their savings.

“While we are generally very frugal, it appears our efforts are not enough,” KT Hundsen from Minneapolis told The Epoch Times.

“I have noticed that my husband has cashed out several times, either bonds or stocks, in $10,000 amounts, to be able to pay our usual bills,” she said.

She and her husband are finding ways to reduce expenses by trimming their budget on clothing and furnishings, while also growing more plants and flowers from seeds in their garden.

“We eat out once or twice a month with the grandkids, but instead of dinner, we go for breakfast, which is less costly,” she said.

Retirees rely on a fixed income from their pension plans or Social Security checks, and inflation is gradually depleting their investments and emergency reserves. In a recent report, Boston College projects that middle-income retirees will see a 14.2 percent decline in their financial wealth between 2021 and 2025 due to inflation.

Dennis O'Connor, an 84-year-old retiree from Temecula, Calif., says it’s harder for retirees to adjust their spending to cope with inflation.

“Personally, like most seniors, we have had to adjust not only our current spending but also our spending for a very unpredictable future,” Mr. O'Connor told The Epoch Times.

Dennis O'Connor and his wife Christy O'Connor at their home in Temecula, Calif., on Oct. 12, 2022. (John Fredricks/The Epoch Times)

Before the recent price surge, Americans dealt with modest inflation for more than 40 years. Hence, most retirement funds weren’t adequately prepared to cope with the challenges of a high-inflation environment, he said.

Mr. O'Connor and his wife now spend less on traveling, eating out, and going to the movies.

“Inflation has been much higher than the 19 percent the press talks about. For example, we used to regularly go for lunch at a special restaurant and the cost has increased by 40 percent,” he said.

“It doesn’t stop there; prices for home supplies, gifts, tools, and even items like dog and bird food have skyrocketed. It’s frightening.”

Consumers Turn to Cheaper Goods

According to a new Adobe Analytics report, consumers are increasingly trading down to cheaper goods to cope with stubborn inflation in major e-commerce categories such as personal care, electronics, apparel, furniture, and groceries.

Adobe analyzed the internet shopping habits of consumers from January 1 to April 3. The analysis revealed that low-cost items accounted for a substantial share of online sales compared to five years ago.

The share of unit sales that came from the cheapest quartile of goods rose by 96 percent in personal care, 64 percent in electronics, and 47 percent in apparel.

In addition, shoppers are flocking to store brands to save money.

“Trading down is clearly a requirement if we are to meet our established budget. There are many foods we have just limited from our meals,” Mr. O’Connor said.

Some companies are closely monitoring this trend and have even adjusted their strategy to offer more bargain deals or store brands.

“Customers are shopping but remain cautious, trading down on price when they can and seeking out deals,” Andy Jassy, CEO of Amazon, said during the company’s earnings call recently.

A person shops for shoes at a store in Ellicott City, Md., on March 24, 2024. (Madalina Vasiliu/The Epoch Times)

Although illegal, millions of Americans are also trying to purchase prescription drugs from Canada, Mexico, or other countries to save money.

More than 2 million Americans, or 1.5 percent, buy prescription drugs from abroad, according to a 2020 University of Florida study.

Last month, annual inflation ticked down to 3.4 percent from 3.5 percent in March, according to the latest Labor Department data, raising the possibility of interest rate cuts in the near future and bringing a ray of hope to the financial markets.

On May 15, President Joe Biden welcomed the drop in inflation while acknowledging that there is still progress to be made.

“Core inflation has fallen to its lowest level in three years. But many families are struggling, and we have a lot more to do,” President Biden stated on social media platform X.

“That’s why I have a plan to lower housing costs, lower prescription drug prices, and lower child care costs.”

The public mood, however, remains sour. According to the ABC News/Ipsos poll, the economy and inflation are among the most important problems for voters in the 2024 presidential election, with more Americans trusting former President Donald Trump on these issues over President Biden.

Overall, prices have surged nearly 20 percent since President Biden took office in January 2021. According to data from the U.S. Bureau of Labor Statistics, gasoline prices have increased by more than 55 percent, while food and housing prices have surged by 21 percent each.

Stacy Robinson contributed to this report.