Bidenflation is putting America’s families on the brink

Photo by Gage Skidmore, CC BY-SA 2.0, via Flickr, https://creativecommons.org/licenses/by-sa/2.0/

Inflation is like a lingering case of the flu that just won’t go away and let you live your life.

As prices rise, people are tapping into resources that could jeopardize their financial future.

And Bidenflation has put America’s families on the brink of serious failure.

Americans are spending more and saving less

Putting money into savings and retirement accounts while reducing debt is one of the best ways to ensure a strong, stable financial future.

However, chronically high inflation is making it harder for millions of Americans to keep their savings balances high and their debt balances low.

A new study published by Allianz Life of North America found that U.S. households are draining their retirement savings while taking on more debt.

They’re also reducing the amount of money they need to put aside for the future, just so they can deal with their present-day finances.

Almost 7 in 10 respondents said they haven’t contributed as much money to their savings because of the high prices of everyday goods, and 51% of respondents said they’re racking up more credit card debt just to pay for those same essentials. 

Additionally, almost 42% of households said they were dipping into their retirement savings because of inflation.

This is a very “worrying” sign for long-term financial stability, according to the findings in the report.

Kelly LaVigne, Vice President of consumer insights at Allianz Life, said, “The rising cost of living is stretching American budgets. Just because inflation has slowed doesn’t mean prices have gone down. In the short term, it may be wise to delay any major purchases to keep saving toward your future and avoid taking on new debt.”

The research was conducted at a time when Americans are still coping with stubbornly high inflation, which has eroded purchasing power immensely. 

Last month, the Labor Department reported that the consumer price index (CPI) rose 0.4% in February from the previous month.

This index measures the price of everyday goods like gasoline, rent, and groceries, and the CPI report also noted that prices have climbed 3.2% from the year prior.

Inflationary pressures continue to mount

Extremely high inflation is putting serious financial pressure on the majority of American households.

Now, people have to pay more for everyday essentials like food and housing, which often has much more extreme consequences for low-income Americans who are already struggling to make ends meet.

Meanwhile, Americans are going through their savings at a rapid pace, and more are turning to credit cards just to be able to cover the cost of everyday goods.

Credit card debt reached a record high at the end of December, based on recent data from the New York Federal Reserve.

The research also found that 68% of respondents said they think inflation will get even worse over the next 12 months, although the number is down from 74% recorded at the end of 2023.

According to LaVigne, “Inflation isn’t going anywhere – over time the cost of living always goes up – it’s just a matter of how much and how fast.”

Informed American will keep you up-to-date on any developments to this ongoing story.