• Thu. Jun 23rd, 2022

Inflation reshapes Americans’ summer plans

ByDebra J. Aguilar

Jun 14, 2022

Plus, a deep dive into the LGBTQ+ and BIPOC communities reveals a nuanced impact

  • Rising gas and grocery prices are forcing Americans to rethink everything from summer camp to home repairs

  • Staycations are in the cards for many this summer due to inflation, except for baby boomers

  • After being hit particularly hard by the pandemic, BIPOC respondents are looking to make the most of this summer by spending more per month than any other group

SPRINGFIELD, Mass., June 14, 2022–(BUSINESS WIRE)–With inflation now at the forefront of many Americans’ financial concerns, summer plans are set to look dramatically different this year based on recent Consumer Spending and Savings Index of the Massachusetts Mutual Life Insurance Company (MassMutual).

Additionally, this new research dives deeper into the perspectives of BIPOC and LGBTQ+ communities to examine how they are responding to current economic pressures.

Notable findings include:

  • The number of Americans who were unable to save money the last quarter almost tripled year-on-year (12% to 31%).

  • Americans generally plan to spend about $2,240 a month this summer with the restaurant, apparel and travel industries likely feeling the brunt of budget cuts.

  • To determine whether to send their children to summer camp, inflation proved to be an important factor, with 68% of respondents indicating that it had an impact on their decision.

  • Almost three out of four LGBTQ+ respondents (74%) who are invest Fewer than before say it’s largely because they have less money to spend on investments due to rising costs.

  • Inflation is a priority for BIPOC communities in the United States. Forty-three percent of respondents said inflation was their biggest concern when it comes to their day-to-day finances — a share more than three times larger than the second most important issue, COVID-19 (13 %).

“This latest version of our Spending and Savings Index highlights the significant financial inflation inflicted on Americans, including the LGBTQ+ community and people of color,” said Mike Fanninghe/she, head of MassMutual US “In many cases, inflation has exacerbated the already damaging financial effects of COVID and prolongs many financial habits developed during the pandemic, such as eating less at restaurants.”

Inflation disrupts the spending and saving habits of Americans. Americans pay more for gas and groceries and save money by delaying major purchases and investing less. Some are also turning to more volatile investments like cryptocurrencies.

  • As inflation took its toll on Americans’ wallets, many exceeded their budget over the past 3 months, especially for groceries (49%) and gasoline (43%).

  • More than half are delay major purchases such as cars (42%) and major home repairs/improvements (38%).

  • Despite some news of salary increases, more than half of Americans (58%) say their income remained the same during the pandemic, with 57% also saying they expect their finances to stay about the same over the next year, indicating an ongoing struggle for many.

  • Individual investors have been slow to change their investment and savings strategies, 80% of which are staying the course. However, the majority of those who have changed their approach are investing less (34%).

  • Many Americans are caught up in the volatility of cryptocurrencies. Twice as many Americans have increased their cryptocurrency investments (27%) than decreased their cryptocurrency investments (15%) in the past 3 months. This is especially true for men, 37% of whom have increased their investments in cryptocurrency, compared to just 15% for women.

Many Americans are rethinking their summer spending plans with the restaurant, apparel and travel industries likely continuing to feel the budget cuts that began during COVID.

  • Gas (57%) and vacations (36%) are the most common categories of new expenses.

  • Just under two-fifths of respondents (39%) plan to travel this summerbaby boomers citing travel as a spending priority (42%).

  • Among the 45% who do not plan to travel, the most common reason for staying at home is that inflation has made travel too expensive (49%).

  • The most common domains Americans say they want reduce expenses eat out (85%), travel (66%) and wear new clothes (64%).

In the LGBTQ+ community, women plan to spend a lot less this summer. Average monthly summer spending for respondents who identify as LGBTQ+ is $1,920, with men on average spending significantly more than women ($2,136 vs. $1,756).

  • Only 37% of LGBTQ+ respondents say they will travel this summer. Of those who won’t, nearly half say they won’t travel because of inflation (49%).

  • Baby boomers were much more likely to cite travel as a spending priority compared to all younger generations (31% vs. 12% Gen Z, 14% Millennials, 20% Gen X).

  • LGBTQ+ women are much more likely to limit their spending eat outside compared to men (90% versus 67%).

The BIPOC community leads the pack with their average monthly summer spend of around $3,150 per month.

  • 44% of BIPOC respondents plan to travel this summer. However, unlike the general population, BIPOC baby boomers are the least likely to intend to travel this summer, with half saying they have no intention of travelling.

  • More than half (52%) of BIPOC baby boomers who don’t plan to travel say it’s because of safety concerns surrounding COVID.

Sending children to summer camp is now a difficult decision.

  • To determine whether to send their children to camp this summer, inflation proved to be an important factor, with 68% of respondents indicating that it had an impact on their decision.

  • Millennial parents were much more likely (35%) to send their children to camp than Gen X parents (15%).

  • Of the parents who do not send their children to summer camp this year, 40% said it was too expensive due to inflation.

“It looks like this summer is not going to be a return to normal,” Fanning said. “Americans will face stubborn inflation, and business owners will likely continue to see uneven results, as the specter of COVID still looms. However, Americans who establish good financial habits and are able to adopt a long-term approach to their financial planning is probably best prepared to weather the storms ahead.”

Methodology

The MassMutual Consumer Spending and Savings Index tracks financial outlook and behavior in a changing economic environment. It offers detailed insight into people’s saving and spending behaviors and examines sentiment and attitudes towards managing the financial impacts of the pandemic and the changing economy with a focus on inflation, changes in interest rates and summer spending. Commissioned by MassMutual, the research was conducted online by PSB Insights from May 16-24, among a nationally representative sample of 1,000 American adults (ages 18 and older) plus additional samples of 500 LGBTQ+ American adults, 500 BIPOC American adults and 500 adult Massachusetts residents.

Links to previous indexes:
March 2022 index
Index for November 2021
August 2021 Index
May 2021 index

About MassMutual

MassMutual is a leading mutual life insurance company that is managed for the benefit of its members and participating policyholders. Founded in 1851, the company has always been driven by one constant goal: we help people secure their future and protect those they love. With a focus on long-term value creation, MassMutual offers a wide range of protection, accumulation, wealth management and retirement products and services. For more information, visit www.massmutual.com.

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See the source version on businesswire.com: https://www.businesswire.com/news/home/20220614005165/en/

contacts

Media:
Paula Tremblay
MassMutual
ptremblay@massmutual.com