Americans dig into savings as inflation soars

Americans dig into savings to help battle inflation. (Credit: CNN, KNXV, KCRA, WABC)
Published: Jul. 17, 2022 at 9:32 AM CDT
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(CNN) - With inflation hitting a 40-year high, soaring prices are forcing some Americans to make brutal decisions.

For many, that means digging into their savings just to get by.

Virginia resident Rosita Kline now searches several grocery stores for the cheapest options. Her husband is currently battling Parkinson’s disease, making these price hikes far more painful.

“We are using our savings,” she said.

Kline adds that she is nervous about the future.

Inflation in America surged in June with some of the steepest price hikes from June 2021 in places like Baltimore and Miami with increases of 10.6%, Atlanta with an increase of 11.5%, Phoenix with an increase of 12.3% and Alaska with an increase of 12.4%

Gasoline is up 60% in a year, while groceries are up 12%. Rent is seeing its highest monthly rise in rent since 1986.

All of those hikes are straining Karen Martin, a 911 operator near Tampa, Florida. She is a single mom raising two sons while making less than $20 an hour.

“I’m not making ends meet. I’m not making it. I’m spending my savings. I get paid tomorrow and already, my whole paycheck is spoken for. It’s the first time in my life I’ve had to apply for food stamps because I don’t know how we’re going to continue eating groceries,” she said.

Consumer sentiment hit a record low last month as new polling shows 42% of Americans are struggling to remain where they are financially, nearly double from a year ago, and 85% think the economy is getting worse.

“Especially after COVID, nobody has money for anything and now everything goes up higher and higher,” Eric Johnson said.

It is forcing families to make brutal decisions.

“It’s like what do you want? Eat or drive,” Sacramento resident Janet Nelson said.

Some are forgoing bills or medications and many others are turning to assistance programs like food banks.

“We have seen skyrocketing numbers of people needing food and unfortunately, we are not getting the same level of donations that we used to,” River City Food Bank Executive Director Amanda McCarthy said.

On top of brutal price hikes, Bonita Wesley expects to face a sizeable rent hike in the months ahead. She says she most likely will not be able to afford it.

“I probably would have to move in with my kids,” she said.

By estimate, the typical American household is now spending more than $500 more every month on the same goods and services.

Many Americans say their salaries are not keeping up with the rate of inflation.

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