Elevated prices are wearing down on the mom of two Emmetisha Williams.
“You can see the difference when I check my receipts. Everything has jumped,” Williams said.
Inflation eased slightly in April, providing a bit of hope for Americans. The Consumer Price Index rose less than expected, up 3.4% from a year earlier, down from 3.5% in March.
Although grocery prices fell for the first time in a year, it remains one of the spending categories where consumers have faced the greatest pressure from price increases.
“I spend mostly on groceries. Pretty much in a week I spend $300-$400 on groceries and I have two kids; they’re young,” said Williams.
An analysis by Trace One shows since March 2020, the cost of eggs has increased by 50%. More recently, beef products have seen significant price hikes, claiming the top three spots in year-over-year increases. Consumers are having to cut spending in other areas.
“We’re buying less clothes for ourselves. We're also spending a lot less money on going out and entertainment, things like that; and looking at the things we can do at home to save money,” said Mary Holjes.
The spending consumers are doing, appears to be going on their credit cards.
A Federal Reserve Bank of New York report said that household debt levels rose 1.1% in the first quarter. Thomas Nitzsche with Money Management International said more and more people are seeking advice on how to reduce their debt.
“The average level of credit card debt that those people have is now over $30,000 in unsecured debt, which primarily represents credit cards,” Nitzsche said.
The financial educator said for people feeling a tighter squeeze on their finances, budgeting is key. He also suggests asking your creditors about reducing your interest rates.
“If we work with them in a debt management program through a nonprofit credit counselor like us, we can reduce interest rates on average about 19 percentage points,” Nitzsche said. “So, anything you can do to work with your creditor or counselor to get the interest rates down so more of your payment is going towards principal rather than interest.”
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