‘Funflation’: The Weird Effect Higher Prices Are Having On Americans’ Spending Habits

There's a battle raging between short-term pleasure and long-term planning. ‘Funflation’: The Weird Effect Higher Prices Are Having On Americans’ Spending Habits Giphy

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If you’ve been to a supermarket (or hardware store, car dealership, etc.) lately, you’re keenly aware of the impact inflation has had on prices far and wide. But paradoxically, all debt inflation has caused hasn’t curbed our collective desire to splurge.

Coining a new term

The pandemic led to a host of new terms to describe human behavior, from “doomscrolling” to “quiet quitting.”

And now we have one to describe how the lockdowns inflation influenced the way we are spending our money.

According to credit analyst Matt Schulz, the emergence of “funflation” as a buzzword stems from the fact that so many people are shelling out big bucks for luxury trips, expensive concerts, and more … even as they go further into debt as a result.

“It’s hard to overstate the impact of the pandemic,” he said. “It changed the way so many people view their spending, and the result is that people are more focused on the ‘right now’ than thinking about 40 years from now.”

Here’s how it’s all playing out in the marketplace:

  • More than one-fourth of adults said they’d take on more debt this year to travel.
  • About 14% told pollsters their desire to eat out would result in additional debt.
  • More than 1 in 8 plan to use credit cards for a concert or sporting event.

Risk vs. reward

It’s understandable that the pandemic gave Americans a different perspective on life, but what are the consequences of all this additional debt?

Bankrate’s Ted Rossman says many consumers seem to be taking a gamble that the long-term effects will be minimal.

“Some of that reflects a ‘you only live once’ mentality that intensified during the pandemic, and some of that is because many economic indicators — including GDP growth and the unemployment rate — are in favorable shape.”

Chris Agee
Chris Agee June 27th, 2024
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