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Many Americans are suffering from sticker shock after seeing prices rise in recent months.
A new survey from Country Financial finds that 88% of Americans are highly concerned about inflation.
That’s as consumer prices soared to a more than 30-year record high in October, as measured by a 6.2% year-over-year change to the Consumer Price Index, a government measurement of how prices change over time.
However, retail spending also rose faster than expected in October.
The poll by Country Financial, conducted between Oct. 22 and 25, found that many Americans do plan to cut back their spending. Of the 1,031 adults ages 18 and up surveyed, 48% said they plan to reduce their spending on restaurant meals and takeout.
Moreover, 30% said they plan to skip upgrading their personal technology devices, 29% said they will purchase less clothing, 20% are delaying or canceling travel plans and 13% plan to drive less.
The uptick in consumer spending that has happened thus far can be attributed in part to pent-up demand due to a combination a record level of cash some Americans were able to sock away while certain restrictions limited discretionary spending.
Often, the amount people spend also tends to go up with inflation by default as prices rise, said Scott Jensen, manager of the financial planning support department at Country Financial.
Consumers often try to offset higher prices by replacing the goods they purchase where they can — by buying ground beef instead of a more expensive steak, for example.
But with current product shortages, that can be more difficult for consumers to do, Jensen said.
“If I can’t substitute or I can’t have the freedom to choose, then I am more affected by price increases and what’s left,” Jensen said.
Consumer spending could also be increasing now as purchases that are being made now with the idea of beating higher prices or product shortages later.
For those reasons, some experts have advised consumers to make their holiday purchases now.
However, there are concerns that holiday shoppers will go into debt. A recent survey from CreditCards.com found that most people plan to spend either the same or less this holiday season compared to last year.
However, with credit card purchases rising, there are risks that holiday shoppers could go into debt or add to existing balances.
Another recent survey from DebtHammer.org found that while more than 78% of Americans plan to set aside money for their holiday purchases, 58% said they plan to take out payday or other short-term loans and 66% plan to use buy now, pay later plans.
In a high-inflation environment, it helps for shoppers to have a spending strategy going into the holiday season.
“Being a conscious consumer will help in these conditions,” Jensen said.
Look for ways to cut back on spending and be strategic about buying now to beat price increases in the future, he said.
How long inflation will stick around is up for debate among experts.
“If I’m using history as a bench mark, odds are that it doesn’t last longer than another year or so,” Jensen said. “But I wouldn’t be surprised to see the bulk of next year’s experience still be one where we’re concerned about the impact of rising prices.”