MassMutual Consumer Spending & Saving Index: Inflation is Reshaping Americans’ Summer Plans

• Increased gas and grocery prices have Americans rethinking everything from summer camp to home repairs
• “Staycations” are in the cards for many this summer due to inflation—except for Baby Boomers
• After being hit particularly hard by the pandemic, BIPOC respondents are looking to make the most of this summer—spending more per month than any other group

Springfield, Mass. – June 14, 2022– With inflation now at the forefront of many Americans’ financial concerns, summer plans are poised to be dramatically different this year according to the latest Consumer Spending & Saving Index from Massachusetts Mutual Life Insurance Company (MassMutual).

In addition, this new research dives deeper into the perspectives of the BIPOC and LBGTQ+ communities to examine how they are reacting to today’s economic pressures.

Notable findings include:

• The number of Americans who were not able to save money last quarter nearly tripled YoY (12% to 31%).
• Americans overall plan to spend about $2,240 each month this summer with restaurant, clothing and travel industries likely feeling the brunt of budget cutbacks.
• In determining whether to send their kids to summer camp, inflation proved to be a significant factor with 68% of respondents indicating it impacted their decision.
• Nearly three out of four LGBTQ+ respondents (74%) who are investing less than before say it is largely due to having less money to put towards investments due to rising costs.
• Inflation is top-of-mind for BIPOC communities in the United States. Forty-three percent of respondents said inflation is their greatest concern when it comes to their day-to-day finances—a share over three times larger than the next largest issue, COVID-19 (13%).

“This latest iteration of our Spending & Saving Index underscores the significant financial toll inflation has inflicted on Americans, including the LGBTQ+ community and people of color,” said Mike Fanning, he/him, head of MassMutual U.S. “In many cases, inflation has exacerbated the already damaging financial effects of COVID and is extending many financial habits developed during the pandemic such as dining out less.”

Inflation is upending Americans spending and savings habits. Americans are paying more for gas and groceries and cutting corners by delaying major purchases and investing less. Some are also turning to more volatile investments like cryptocurrencies.

• As inflation has taken its toll on Americans’ wallets, many have exceeded their budgets in the last 3 months, particularly for groceries (49%) and gas (43%).
• Over half are delaying major purchases such as cars (42%) and major home repairs/improvements (38%).
• Despite some news of increases in salaries, over half of Americans (58%) say their incomes have stayed the same through the pandemic, with 57% also saying they expect their finances to remain about the same through the next year, pointing to a continued struggle for many.
• Individual investors have been slow to change their investment and savings strategies, with 80% staying the course. However, the majority of those who changed their approach are investing less (34%).
• Many Americans are caught up in the volatility of cryptocurrencies. Twice as many Americans increased their investments in cryptocurrency (27%) than decreased their investment in cryptocurrency (15%) in the last 3 months. This is especially true for men, of which 37% increased investment in cryptocurrency compared to just 15% of women.

Many Americans are rethinking their summer spending plans with restaurant, clothing and travel industries likely continuing to feel the budget cutbacks that began during COVID.

• Gas (57%) and vacations (36%) are the most common categories of new spending.
• Just under two-fifths of respondents (39%) plan to travel this summer, with Baby Boomers listing travel as a top spending priority (42%).
• Among the 45% who are not planning to travel, the most common reason for staying at home is that inflation has made travel too expensive (49%).
• The most common areas Americans report they are aiming to decrease spending are eating out (85%), travel (66%) and new clothes (64%).

In the LBGTQ+ community, women plan to spend significantly less this summer. Average monthly summer spending for respondents identifying as LBGTQ+ is $1,920, with men spending significantly more than women on average ($2,136 vs. $1,756).

• Only 37% of LBGTQ+ respondents say they will travel this summer. Of those who will not, nearly half say they will not travel due to inflation (49%).
• Baby Boomers were much more likely to cite travel as a top spending priority versus all younger generations (31% vs. 12% Gen Z, 14% Millennials, 20% Gen X).
• LBGTQ+ women are significantly more likely to be limiting spending on eating out compared to men (90% vs. 67%).

The BIPOC community leads among groups with their average monthly summer spending at about $3,150 each month.

• 44% of BIPOC respondents plan to travel this summer. However, unlike the general population, BIPOC Baby Boomers are the least likely to have plans to travel this summer with half saying they have no plans to travel.
• Over half (52%) of BIPOC Boomers who do not plan to travel say it is because of safety concerns surrounding COVID.

Sending the kids to summer camp is now a fraught decision.

• In determining whether to send their kids to camp this summer, inflation proved to be a significant factor with 68% of respondents indicating it impacted their decision.
• Millennial parents were much more likely (35%) to send their kids to camp than Gen X parents (15%).
• Of the parents who are not sending their kids to summer camp this year, 40% said it was too expensive due to inflation.

“It appears this summer will not be a return to normal,” said Fanning. “Americans will have to grapple with stubborn inflation, and business owners will likely continue to see uneven results, all while the specter of COVID still looms. However, Americans who are establishing good financial habits and are able to take a long-term approach to their financial planning are likely best prepared to weather the storms ahead.”