Consumer Perception of Financial Health Took a Nosedive in 2022

The pandemic and its ensuing economic chaos created a very difficult time for people as far as their finances were concerned. Once the pandemic receded, many assumed that the economic situation would settle down somewhat, but in spite of the fact that this is the case 40% of families have seen their financial health further plummet in 2022.

Europe seems especially badly hit, but with all of that having been said and now out of the way it is important to note that the US is not immune to the rampant inflation that is wreaking havoc across the globe. This data comes out of a new report published by Deloitte, and it highlights the financial woes that so many families are continuing to struggle with.

People who are within the 40% who claim that they are worse off have a lot of other things to worry about as well. 67% of them are worried about dwindling savings, compared to 31% of people who have not seen a financial decline who said the same. A similar proportion, 67% to be precise, are worried about how they will meet upcoming payment deadlines.

The biggest cut is going towards discretionary spending. 26% of the average person’s monthly budget was for discretionary spending back in 2021, but this year it has dropped by 3 points to just 23%. That is putting the squeeze on many industries, since consumers have less money to spend than might have been the case otherwise and the higher prices are not helping matters along either.

We are going through a period of inflation that has not been seen in many decades, and it spelled the end of an extended bull run of the stock market among many other positive economic indicators.

Things are certainly starting to look dire in 2023, but many are asserting that this is when inflation will peak and we will hopefully see a turning of the tide by the time 2024 comes around. Until then, consumers will be pinching pennies and brands will be scrambling to entice them into buying anything at all to bolster their revenues.

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