A Third of Americans Are Tapping Their Savings to Cover Expenses Due to Inflation

Rising costs affect everyone -- though some more than others.

Everywhere you look, you can see the symptoms of our current inflation crisis. Everything is more expensive, from groceries to housing and everything in between. And despite workers finally getting the upper hand in many industries, wages are still nearly as stagnant as they have been the past decade.

U.S. consumers have been taking a lot of steps to try to keep their finances afloat. Nearly half of shoppers have switched to cheaper alternatives, and generic/store brands are gaining in popularity.

But even switching to store brands and downloading every couponing app can only go so far. Which is evidenced by the fact that a third of Americans are reportedly dipping into their savings to cover expenses. That's according to a survey by the National Retail Federation.

It's just not low-income households feeling the sting, either. Here's how the numbers break down for people relying on savings right now:

• Households making less than $50,000 a year: 36%
• Those in the $50,000 to $100,000 range: 32%
• People above $100,000 per year: 33%

Lower-income households are also taking on debt

Where you really see the difference income makes is when we start talking about debt. Nearly a third (32%) of those making less than $50,000 report having to borrow money and/or take on debt to make ends meet.

Conversely, that share drops to 13% for households with incomes in the $50,000 to $100,000 range. And it drops to just 7% for households making $100,000 or more.

A big part of the difference is likely how much these families had in savings before inflation set in. According to The Ascent research, as of May, the median savings account balance in the U.S. was around $4,500. But that's the median number -- meaning half of Americans had much lower balances in their savings accounts.

In fact, a Federal Reserve report from the same time concluded that more than a third of Americans didn't have an emergency fund capable of covering an unexpected $400 expense. With that in mind, many folks may not even have savings to tap into by this point, making debt the only option.

People in the higher income brackets likely started the summer with larger emergency funds, as well as better-funded savings accounts in general. Larger cushions means they can withstand inflation forces far longer before needing to rely on debt to cover everyday necessities.

Cheaper brands, coupons, and sales

Another thing that may be helping those in higher income brackets spread their savings further is that they might have more wiggle room in their budgets.

Lower-income households already on a tight budget don't have much room to make cuts. On the other hand, those making more money likely have some unnecessary expenses that can be cut back before they need to take the ax to anything vital.

Similarly, households who were buying generics and using couponing to make ends meet before inflation hit don't have these avenues to fall back on -- they were already using them. But those who were able to afford name-brand items and pay full price now have more ways to trim the budget.

And we are definitely seeing some trimming. In the National Retail Federation study, nearly half of U.S. shoppers reported switching to cheaper alternatives for everyday necessities. And nearly as many are turning to coupons and sales more often than they did this time last year. There's also a large number of shoppers adopting store brands and frequenting discount stores.

If inflation continues, all bets are off

Although those with higher incomes may be avoiding debt for now, even their larger savings pools won't last forever. If inflation continues at the high rates we've seen this summer, even those in the $100,000-plus income brackets may start running out of options.