Consumers under price pressure are combining multiple budgeting tactics rather than relying on spending cuts alone, according to a PYMNTS Intelligence data book published today titled “Five Ways Consumers Make Tight Budgets Work Harder.”
The report separates consumers into proactive, balanced and reactive groups based on how they respond to financial strain. Thirty-five percent of proactive consumers, who combine steps such as adding income, negotiating bills and managing payment timing, rated their coping strategies as very or extremely effective. That compares with 27% of balanced consumers and 19% of reactive consumers.
Spending cuts remain widespread among strained households. Among paycheck-to-paycheck consumers who struggle to pay bills, 53% spent less on nonessential purchases such as dining out, entertainment and travel over the past year, nearly double the 27% rate recorded among consumers who do not live paycheck to paycheck. Another 24% of financially strained consumers kept nonessential spending roughly flat, and 23% spent more.
Private label ranked as the most common everyday savings tactic. Forty-nine percent of Labor Economy consumers bought store-brand or private-label products in the past year, ahead of coupons and promotional codes at 46%, price comparisons at 41% and cashback or rewards apps at 31%.
Smartphones are also being used at the shelf. Among consumers who used mobile assistance while shopping in stores, 36% did so to find a product’s location, 35% searched for coupons and discounts, and 26% compared prices at other merchants.
Where consumers shop tracked with their level of financial stress. 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. In stores, the gap was wider, at 37% for high-stress shoppers versus 26% for low-stress shoppers.
PYMNTS said none of the tactics measured neutralizes higher prices, and that relief for households remains limited. The firm characterized the findings as evidence that consumers are assembling several small defenses instead of a single large one, and reported that consumers using a broader set of tactics described better outcomes than those depending mainly on retrenchment.
