Middle-income households are cutting back on spending, taking second jobs and delaying large purchases – such as cars and homes – to adapt to higher prices as inflationary pressures continue, a new survey from global bank Santander Holdings USA Inc. shows.
Nearly three in four middle-income households (72%) reported seeing prices rise in the second quarter, and four in five (78%) said inflation is a major concern. To cope, most middle-income households (90%) have made spending cuts in at least one area, and many plan to curtail spending on a range of items this summer—from vacations to entertainment to summer camps and childcare. Four in 10 said they have taken on a second job or side gig in the last 12 months to help make ends meet.
By making these trade-offs, many consumers have remained resilient despite higher prices, with eight in 10 middle-income households (77%) staying current on their bills. This helps to explain why most middle-income consumers continue to be optimistic about their financial futures, with most (72%) believing they are on the right track toward financial prosperity.
“While current economic conditions remain challenging, American households are showing great resiliency by taking the necessary actions to navigate through inflationary pain points,” said Santander US CEO Tim Wennes. “For many households, this has meant scaling back on spending, including summer activities.”
The study, which built upon previous research, assessed middle-income Americans’ current financial state and future aspirations, with a focus on how current economic conditions have impacted their households. It also explored their financial relationships with drivers of prosperity, including vehicle access, housing, and banking providers.
Click here for more from the survey.