Inflation causing Americans to postpone retirement, homebuying, college, vacations & more: Nationwide

Inflation surged to yet another 40-year high in March, rising 8.5% annually according to the Consumer Price Index (CPI). Not only are consumers spending much more money at grocery stores and gas pumps than the same time last year — rising inflation has also driven up the cost of living when it comes to a variety of basic expenses like utilities, rent and transportation. 

Of concern, a new survey from Nationwide suggests that soaring prices on consumer goods are causing many Americans to postpone financial milestones like retiring, buying a home and going to college.

But consumers aren't just shifting their future financial plans. They're also changing their current spending habits by making food at home, driving less and searching for higher-paying jobs, the survey said. What's more, many Americans are becoming more reliant on credit cards to cover necessary expenses. 

Keep reading to learn more about how U.S. consumers are adapting to higher prices. And if you're among the many Americans who are relying more on credit card spending, you may be able to save money by consolidating debt into a personal loan. You can learn more about credit card consolidation and compare offers by visiting Credible.

FED'S BATTLE AGAINST INFLATION COULD SLOW ECONOMIC GROWTH: FANNIE MAE

Many consumers postpone, cancel financial milestones amid inflation

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

About two in five respondents (41%) said that inflation has caused them to postpone or cancel a vacation, or at least consider changing their plans. Nearly as many (37%) have decided to reassess their plans to buy a car at a time when new vehicle prices are at an all-time high. And a quarter of homebuyers are waiting out this year's competitive real estate market due to inflation.

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

Additionally, many survey respondents said they're changing their current spending habits to offset rising consumer prices. Nearly half (48%) said they're eating out less often, while about a quarter (24%) are considering doing this. Over a third (35%) have started driving less, and 24% more are thinking about decreasing their time behind the wheel.

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

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

HIGHER INFLATION RATES ERODE SOCIAL SECURITY PURCHASING POWER, ECONOMIST SAYS

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

The vast majority of Americans surveyed by Nationwide are either very concerned (56%) or somewhat concerned (34%) about surging inflation. Just 9% said they're not concerned about rising consumer prices.

About two-thirds (64%) of survey respondents said the Federal Reserve should be doing more to address 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 previously indicated that several rate hikes throughout 2022 may be necessary to offset rising consumer prices. 

NEARLY 70% OF MEDICAL DEBT IN COLLECTIONS WILL BE REMOVED FROM CREDIT REPORTS, BUREAUS SAY

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

Mortgage rates soared to nearly 5% in April, according to Freddie Mac. This is the highest that mortgage interest rates have been since 2018, which is driving up the cost of borrowing for prospective homebuyers.

Rate hikes may also impact consumers who carry variable-rate debt, such as revolving credit card balances. Recent rate increases will likely cause variable credit card APRs to rise, which can lead to higher monthly payments for credit card users. 

If you're struggling to manage credit card debt amid inflation and rising interest rates, you could consider debt consolidation. This financial strategy involves repaying your credit card balances with a fixed-rate personal loan — this means your interest rate and monthly payment will stay the same throughout the repayment term.

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 move for your financial situation.

FINAL ESTIMATE REDUCES Q4 2021 GDP TO 6.9%: BUREAU OF ECONOMIC ANALYSIS

Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.