90% of Americans Are Slashing Spending Due to Inflation. Here's How to Decide What to Cut

Is it time for you to reduce your spending?

For months on end, inflation has been raging, and it's reached the point where many consumers are consistently dipping into their savings accounts and racking up scores of credit card debt just to make ends meet. If that's the situation you're in, it may be time to seriously contemplate some spending cuts.

According to a recent savings.com survey, 90% of American consumers are slashing their household spending to account for higher living costs. And so if you go that route, you'll be in good company.

But how do you know which expenses to slash? There's really one simple question you need to ask yourself.

How much joy does this bring me?

Some of your recurring living expenses are apt to be non-negotiable. For example, you need a roof over your head, and if you own a home, selling and moving can be a very expensive prospect. As such, it's reasonable to count your mortgage as a non-negotiable expense, just like food, work-related apparel, and the medications your doctor says you need to take.

But there are probably a number of expenses you pay for regularly that aren't essential. These might include things like meal delivery kits, subscription boxes, streaming services, and gym memberships. And it's this category of expenses you'll want to look at in the context of spending cuts.

Meanwhile, if you're not sure which non-essential bills to start slashing, ask yourself how much joy each one brings you. Maybe you like having a Netflix subscription, and maybe you enjoy taking a kickboxing class with your friends once a week. But if you absolutely cannot manage without your daily store-bought latte and your weekly takeout meals, then keep those, but cut back on the aforementioned bills.

It's all about priorities

When money isn't tight and your savings look good, you don't necessarily have to start cutting expenses just to save a few extra dollars a month. But at a time like this when living costs are soaring, you may have to make some harder choices.

In that situation, the best thing you can do is set priorities. You may have different expenses you enjoy spending money on, but some might enhance your quality of life more so than others -- and those are the expenses worth keeping. But if you can manage without your subscription boxes and start jogging outdoors instead of paying for the gym, then make those cuts to free up the cash you need. It's a far better bet than letting inflation erode your savings and force you into a world of credit card debt.

One final thing -- while cutting back on essential expenses isn't easy, there may come a point where that becomes necessary, too. That could mean selling your car and replacing it with a cheaper one, or moving to a less expensive rental home. We may be in for many more months of rampant inflation, so it's important to do what you can to conserve cash until things settle down.