As the upcoming Memorial Day weekend signals the unofficial start of summer, many Americans are postponing or canceling their vacation plans due to frayed state of their finances.
According to a new survey from ScoreSense, a credit score monitoring product, 50% of respondents said their summer vacation plans are either being delayed or scrapped due to their struggles in today”™s high-inflation economy. For those who were planning to have a summer vacation, one in three respondents said they were planning to spend less money on expensive destinations while 53% intended to spend less than $2,000 ”“ the latter strategy was more prominent among respondents who do not have children (69%) compared to those with children (31%). Older respondents were more likely to spend less than $2,000 on summer trips compared to younger respondents.
As for the reasons why vacations are not a priority for many Americans this summer, many respondents said they used personal loans to help pay for groceries (48%), utility bills (47%), rent and mortgage (42%) and car maintenance and vehicle fuel (both 41%). Nearly one in five respondents admitted they did not have an emergency fund, while 58% of respondents said they only have enough to cover six months or less.
“We’re really starting to see the worst effects of many months of staggering inflation and rising interest rates beating up consumers’ home budgets with people falling behind on bills and changing plans for vacations and major purchases,” said Carlos Medina, senior vice president at One Technologies LLC., which offers ScoreSense. “We’re seeing fewer people apply for loans, an indicator that consumers are postponing major purchases, and some may be struggling with their current credit lines. For those who have a negative credit standing, it’s also less likely that a lender would give them a new account or give them attractive interest rates for an account.”
