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Americans are bracing for a blow to their personal finances in 2024 as they continue to battle stubbornly high prices for necessities like food, rent and medical care.
That’s according to a new survey published by Bankrate, which found that nearly two-thirds of consumers – about 63% – do not expect their personal finances to improve in 2024. That includes 26% who expect their finances to deteriorate and 38% who think their financial situation will remain the same.
Just 37% of Americans expect their finances to improve in the new year.
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Customers shop at a supermarket in Foster City, California, on Sept. 13, 2023. (Photo by Li Jianguo/Xinhua via Getty Images / Getty Images)
The pessimism stems from still-high inflation, which was cited as the top obstacle to financial improvement. Roughly 61% of respondents blamed the ongoing spike in prices for the potential hit to their finances next year.
“[Prices are] still notably higher than just two or three years ago, and that is what households feel,” said Greg McBride, chief financial analyst at Bankrate. “The rate of inflation may be coming down, but prices generally are not.”
While inflation has fallen from the highs of mid-2022, many families have yet to see material relief.
The consumer price index is still running well above the typical pre-pandemic rate, and the cost of necessities like food, gasoline, rent and child care remain far more expensive than they were just one year ago. Chronically high prices are forcing Americans to spend about $650 more per month than they did two years ago, according to a recent estimate from Moody’s Analytics.
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The government reported last week that inflation remains up 3% on an annual basis. However, when compared with January 2021, prices are up a stunning 17.62%.
Shoppers are seen in a Kroger supermarket on Oct. 14, 2022, in Atlanta, Georgia. ((Photo by Elijah Nouvelage /AFP via Getty Images) / Getty Images)
Inflation has created severe financial pressures for most U.S. households, which are forced to pay more for everyday necessities like food and rent. The burden is disproportionately borne by low-income Americans, whose already-stretched paychecks are heavily impacted by price fluctuations.
“A staggering 61% of those not expecting their financial situation to improve point to continued high inflation as a culprit — nearly twice that of any other reason,” McBride said.
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Other commonly cited reasons for the dreary financial outlook include stagnant or reduced income (32%), changing interest rates (22%) and debt (19%).
As they spend more on everyday goods, Americans are burning through their savings, and are increasingly turning to credit cards to cover those basic expenses.
Total credit card debt surged to $1.08 trillion at the end of the third quarter, the highest level on record, according to a recent report published by the New York Federal Reserve. It marks the highest level on record in Fed data dating back to 2003 and the eighth consecutive annual increase.
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