According to a study by WSFS Bank, nearly four in 10 regional residents (38 percent) are spending more now than compared to a year ago, while only one in five (21 percent) are saving more.
The survey, which asked 1,043 Greater Philadelphia and Delaware region consumers between 18 and 55 about their spending and saving trends, as well as the impact of the economy, found that inflation and rising interest rates continue to impact the financial stability of many consumers, which in turn causes changes to their financial behavior.
“While continued economic headwinds have impacted many consumers, there are adjustments you can make to help your money stretch further,” said Shari Kruzinski, executive vice president and Chief Consumer Banking Officer at WSFS Bank. “Some consumers are already adjusting as they’ve reduced spending on restaurant visits (42 percent), entertainment (34 percent), and travel and vacations (34 percent) from last year. While prices for essentials like groceries may have increased, you can still search for savings by looking for discounts from big box or discount retailers and eating at home.”
Consumers said rising costs and inflation were to blame for increased spending (72 percent), but emergency expenses like repairs or medical bills came in a distant second (27 percent). Paying off more debt (23 percent) and rising interest rates on credit cards and loans (23 percent) were also cited as reasons.
Respondents said they are spending more on groceries (60 percent), transportation (53 percent), utilities (50 percent) and housing (43 percent) than last year. In response, respondents said they were cutting back in other areas. Thirty-seven percent said they are slashing non-essential expenditures due to rising interest rates. That increase has pushed 30 percent of respondents to reduce their credit card spending and debt. Another 30 percent said they were steering clear of loans altogether.
Respondents also said they are using their debit cards more than last year (38 percent) or reducing their credit card usage (26 percent). Of those, 37 percent said they were focused on repaying existing debt; 33 percent said they were wary of high credit card interest rates and 31 percent said they were better able to stay on budget without credit cards. Nearly one third (30 percent) said they were increasing their credit card usage.