75% of Consumers Say Inflation Coping Strategies Aren't Working

Core Insights - Young consumers in the U.S. are increasingly struggling with managing daily living expenses, with 51% reporting challenges, a figure that has remained stable since October [4] - The report highlights a generational divide in coping strategies, with younger consumers employing multiple tactics while older generations are scaling back [3][9] Consumer Behavior - Financial stress related to food costs is widespread, with 89% of consumers feeling financial strain when buying groceries, up from 84% in October, particularly among millennials and bridge millennials [4] - Dining out and food delivery have also become significant stress points for 47% of consumers, indicating that food inflation is affecting budgets across all spending categories [3] Healthcare Costs - Rising healthcare costs are impacting different age groups differently, with baby boomers facing increased routine costs while Generation Z is experiencing stress related to prescriptions and mental health services [8] Coping Strategies - A significant portion of consumers, approximately 60% to 75%, are cutting back on everyday spending, with younger cohorts more likely to adopt multiple coping strategies [9] - About 20% of millennials, bridge millennials, and Gen Z are using four or more strategies simultaneously, such as taking on extra work or utilizing installment plans [9] Effectiveness of Strategies - There is a notable decline in the perceived effectiveness of coping strategies, with only 25% of consumers finding their methods extremely or very effective, down from 34% [4][10] - Even among high-intensity copers, there was a 15-percentage point drop in perceived effectiveness across income levels and generations [10] Opportunities for Financial Services - Despite the challenges, consumer engagement remains high, presenting opportunities for financial services firms to design solutions that address recurring cash flow stress rather than episodic spending spikes [12] - Young consumers are seeking tools that provide predictability, flexibility, and visibility in managing expenses, indicating a demand for simplified financial management solutions [11]