Consumers Use Multiple Budgeting Tactics to Manage Higher Prices
As higher prices put pressure on household budgets, consumers are increasingly combining spending cuts with shopping strategies, bill negotiations, payment adjustments and additional income to keep essential expenses on track, according to new PYMNTS Intelligence data.
Consumers Use a Broader Budgeting Toolkit
The PYMNTS Intelligence data book, “Five Ways Consumers Make Tight Budgets Work Harder,” found that households relying on several financial tactics report better results than those focused mainly on cutting spending.
Thirty-five percent of proactive consumers rated their strategies as very or extremely effective, compared with 27% of balanced consumers and 19% of reactive consumers.
Proactive households are more likely to combine additional income with bill negotiations and changes in payment timing. While these measures do not eliminate the impact of higher prices, they can provide households with greater control over the timing of money coming in and going out.
Households Are Cutting Nonessential Spending Selectively
Consumers living paycheck to paycheck and struggling to pay their bills are making targeted reductions rather than eliminating discretionary spending altogether.
Over the past year, 53% of these financially strained consumers reduced spending on nonessential purchases, including dining out, entertainment and travel. That compares with 27% of consumers who do not live paycheck to paycheck.
At the same time, 24% of financially strained consumers kept their nonessential spending roughly unchanged, while 23% increased it, indicating that many households are still preserving some room for discretionary purchases.
Store Brands and Mobile Tools Help Shoppers Save
Everyday shopping decisions are also becoming part of consumers’ budgeting strategies.
Among Labor Economy consumers, 49% purchased store-brand or private-label products during the past year, slightly ahead of the 46% who used coupons or promotional codes.
Mobile devices are also helping consumers make purchasing decisions while inside stores. Among shoppers who used mobile assistance during in-store shopping, 35% searched for coupons and discounts, while 26% compared prices with other merchants.
Financial Pressure Is Shaping Where Consumers Shop
Financial stress is also influencing consumers’ choice of grocery retailers.
Among online grocery shoppers reporting high financial stress, 56% made their most recent purchase from Walmart, compared with 50% of shoppers reporting low financial stress.
The difference was even greater among in-store grocery shoppers, with 37% of high-stress consumers making their most recent purchase at Walmart versus 26% of those reporting low financial stress.
The findings suggest that higher prices are prompting households to use several financial levers at once rather than relying exclusively on expense reductions.
By combining savings measures, shopping strategies and cash-flow adjustments, consumers can create additional financial flexibility while continuing to prioritize essential bills.