Among financial challenges, Americans say inflation hurts worst

On the heels of March’s inflation surprise, a new survey suggests rising prices remain the primary concern for Americans, overshadowing challenges such as high expenses and low income.

In a recent poll by Equitable, three-quarters of respondents (75 percent) reported that their purchasing power has diminished compared to the previous year.

The survey, which gathered responses from over 1,000 individuals, indicates that inflation – which ticked up 0.4 percent in March – continues to be a significant barrier to financial stability for 39 percent of participants. This concern far exceeds other financial hurdles like escalating expenses (17 percent), insufficient income (10 percent), and the burden of high interest rates on debt (8 percent).

"We live in an uncertain world, and this undoubtedly impacts how confident we are about our financial futures," Equitable president Nick Lane said in a statement announcing the findings.

Not even forecasts of rate cuts from the Federal Reserve later this year seem helpful, Lane said, with only a third of Americans saying it would enhance their financial confidence.

The survey also shed light on how Americans plan to use their tax refunds, revealing a pragmatic approach toward spending. A significant 80 percent of respondents counting on a refund intend to use it on the essentials, such as living expenses (50 percent) and debt reduction (29 percent), rather than discretionary spending on travel or entertainment (19 percent).

The findings also underscored challenges Americans face in balancing immediate financial needs with long-term savings goals. Despite the availability of tax-efficient savings options, 70 percent rely on traditional checking and savings accounts for future savings, including retirement.

On average, respondents reported setting aside $175 monthly for retirement while spending significantly more on discretionary items, with a total $400 of spent across categories such as streaming services, dining, and travel.

With countless Americans being subject to a pressure cooker of financial stress and economic uncertainty, Lane emphasized the importance of a holistic approach to financial planning, one that considers an individual's emotional and physical well-being alongside their financial objectives.

"Financial planning can be a deeply emotional and personal subject. It isn’t always linear or rational," he said.