While inflation and rising interest rates have begun to subside, many regional consumers are still feeling the crunch
Thirty-eight percent of regional residents are spending more money now compared to last year, while only 28% are saving more, according to a Money Trends survey from WSFS Bank, the primary subsidiary of WSFS Financial Corporation (Nasdaq: WSFS).
Economic pressures remained, with the rise in costs and inflation noted as the top driver of increased spending (69%) among those who said their spending has increased. While the economy remained challenging, many consumers were able to adapt their spending and saving techniques to put themselves on more solid financial footing.
The annual survey, which polled 1,000 respondents in the Greater Philadelphia and Delaware region, gauged spending and saving trends and the impact of the current economy among adults ages 18-55.
Inflation Cools, But Economic Headwinds Remain
Rising costs and inflation remained the top driver of increased spending by far in 2024 (69%), followed by having to pay off an emergency expense (29%) or debt (28%).
Despite the fairly even split among those who have increased and decreased their spending habits, consumers largely agreed on the increased cost of living, with more than half spending more on essentials like groceries (65%), utilities (55%), and transportation (53%). A larger number say they’re spending more on groceries this year in comparison to 2023 (65% vs. 60%, respectively), as well as housing (50% vs. 43%) and utilities (55% vs. 50%).
“Many consumers are still feeling the pricing pressures in the current economy, with one-third (33%) saying they’re cutting non-essential spending,” said Shari Kruzinski, Executive Vice President, Chief Consumer Banking Officer, WSFS Bank. “While inflation has cooled during 2024 and interest rates are starting to decrease, it is important for consumers to remain disciplined and budget-focused. Look for opportunities to save on expenses through shopping at discount retailers, buying in bulk or waiting for items to go on sale, and remember to reevaluate your budget regularly.”
While one-third indicated they are cutting back on non-essentials in this year’s survey, respondents in 2024 are slightly less likely to report scaling back in comparison to the 2023 survey (33% vs. 37%, respectively). However, they are more likely to be using their savings (19% in 2024 vs. 13% in 2023) for everyday expenses.
Adapting Spending Habits
When asked to assess how their spending has changed in comparison to last year, two in five (38%) indicated they’re spending more, and a nearly equal amount (37%) said they’re spending less.
While rising costs for essentials have continued to weigh on consumers’ wallets, they’ve adjusted to cut discretionary spending as a result, with respondents most likely to be spending less on eating out at restaurants (40%), entertainment (35%), travel and vacations (34%), online shopping and technology (both 31%).
Consumers have also adapted their preferred payment methods, with 44% using their debit card more often, 36% using cash, 35% using their credit card, and 35% using buy-now-pay-later (BNPL) platforms more often.
More than one-third (35%) of participants who use multiple BNPL services agree that they have lost track of what they owe. Additionally, 35% report they have struggled to pay back what they owe to BNPL services, and nearly half (45%) agree that they, or someone they know, has unknowingly built-up debt as a result of using multiple BNPL services.
“Regional consumers have continued to show resilience and adaptability in the face of a challenging economy,” said Shelly Kavanagh, Senior Vice President, Director of Retail Delivery at WSFS Bank. “Keeping your spending habits nimble is key. Many consumers are better able to stay on budget by using their debit card or cash in place of a credit card. Leveraging your online and mobile banking can be a convenient way to manage expenses in real-time. While there is no one-size-fits-all payment solution, it is vital to carefully manage your various accounts and debt to avoid falling into a financial hole.”
Opportunities Still Exist to Save
Nearly half (46%) report that they are saving less overall compared to last year, which is slightly down from 2023 (50%), while 28% are saving more this year, up from 2023 (21%).
Of those who said they are saving more, the leading reason is to ensure future financial stability (42%) – up from 36% in 2023 – followed by having specific savings goals (41%) and being more prepared for financial emergencies or unexpected expenses (40%).
A quarter of respondents were unaware of high-yield money market accounts (24%), while 49% were aware of these accounts but had never used one. Nearly one-fifth (18%) said they were unaware of Certificates of Deposit or CDs, while 47% said they had heard of CDs but never used one.
“Goal-setting is an important part of your financial journey and can help keep your budget and savings on track,” said Kruzinski. “The economic headwinds of the past few years have certainly made it more expensive to borrow and difficult to save, but an opportunity still exists for savers to set goals and take advantage of the still-elevated interest rates through CDs and money market accounts, which tend to offer higher rates than a standard savings account. Scheduling an appointment with your local banker can be a great way to gain a better understanding of the products available to help in your financial journey, define your goals and build a roadmap to achieve them.”
Survey Methodology
The survey was conducted by research company Opinium. The sample includes 1,000 respondents in the Greater Philadelphia and Delaware region who reside in five southeastern Pennsylvania counties (Bucks, Chester, Delaware, Montgomery and Philadelphia), four southern New Jersey counties (Atlantic, Burlington, Camden and Gloucester), and all three Delaware counties (Kent, Sussex and New Castle). All respondents were ages 18-55. The online survey was conducted from August 23-September 5, 2024, with a margin of error of +/- 3 percent.
About WSFS Financial Corporation
WSFS Financial Corporation is a multibillion-dollar financial services company. Its primary subsidiary, WSFS Bank, is the oldest and largest locally headquartered bank and trust company in the Greater Philadelphia and Delaware region. As of June 30, 2024, WSFS Financial Corporation had $20.7 billion in assets on its balance sheet and $84.9 billion in assets under management and administration. WSFS operates from 114 offices, 88 of which are banking offices, located in Pennsylvania (57), Delaware (39), New Jersey (14), Florida (2), Nevada (1) and Virginia (1) and provides comprehensive financial services including commercial banking, consumer banking, treasury management and trust and wealth management. Other subsidiaries or divisions include Arrow Land Transfer, Bryn Mawr Capital Management, LLC, Bryn Mawr Trust®, The Bryn Mawr Trust Company of Delaware, Cash Connect®, NewLane Finance®, Powdermill® Financial Solutions, WSFS Institutional Services®, WSFS Mortgage®, and WSFS Wealth® Investments. Serving the Greater Delaware Valley since 1832, WSFS Bank is one of the ten oldest banks in the United States continuously operating under the same name. For more information, please visit www.wsfsbank.com.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241003503001/en/
Contacts
Media:
Kyle Babcock
(215) 864-1795
kbabcock@wsfsbank.com
