Illinoisans cut back on spending to cope with higher expenses

Adults in Illinois across age groups are grappling with higher expenses such as rent and food, with Black people and Latinos particularly burdened by debt, according to an analysis by AARP, the nonprofit advocacy group.

To cope with rising costs, people are cutting back on spending. Among Latinos surveyed in Illinois, 62% say they are eating out less; 46% are cutting back on buying clothes; 29% are spending less on groceries; and 28% are postponing or canceling vacations.

Results are based on AARP’s survey of 1,249 Illinoisans ages 18 and older conducted by NORC, a research organization at the University of Chicago.

Hermosa resident Saul Garcia, who is Latino, was not part of AARP’s survey, but its results mirror his experience. His rent has jumped to $1,600 from $1,145 in 2020. Garcia, 57, used to eat out three to four times a week, but he has cut back to once a month. Food in particular is more expensive. Steaks cost $30 in the supermarket a few years ago, he recalled; now they are $50.

“I don't do a lot of extracurricular activities anymore,” said Garcia.

More than half of Black adults surveyed in Illinois say they are dining out less often; 42% are cutting back on buying clothes; 29% are spending less on groceries; and 22% are postponing or canceling vacations, according to AARP findings released in October.

This latest analysis was released ahead of U.S. elections as registered voters cite the economy as the most important issue to them, according to a Gallup poll in October. About 52% of voters rated the economy as an “extremely important” influence on their vote for president — the highest since October 2008 during the Great Recession, said Gallup.

Black and Latino adults face more financial pressure than other groups, according to AARP’s findings. Despite saving money and cutting spending, 48% of Latinos and 46% of Black adults in Illinois say they have more debt than they can manage, according to AARP’s analysis. That contrasts with 35% for overall survey participants.

But overall, people of all races across Illinois are belt tightening, with 63% of adults eating out less and 45% buying fewer clothes. Nearly 30% canceled vacations, 36% spent less on groceries and 10% postponed doctor appointments or cut back on medication. About one-third say their debt is unmanageable.

"Americans continue to feel the grip of an inflationary economy with rising prices, namely food and housing,” said AARP’s analysis in October.

Philippe Largent, AARP Illinois state director, said,

“Our hope is that leaders coming together to discuss the country’s most pressing issues will use this data as a starting point — recognizing that every day people are feeling constrained and anxious about money.”

Garica has previously held various jobs, including as a housing counselor for a Chicago nonprofit. Until 2023 he used to drive for Uber and Lyft, but is doing less rideshare work since the companies cut back on sharing fares with drivers from about 70% to 30% to 50% now, he said.

To make ends meet, this summer Garcia started part-time work as a security guard for a store on Michigan Avenue. “I’m trying to piece together enough money to pay bills,” he said.

Garcia accumulated about $55,000 in credit card debt in the past couple years but can cope because he has savings. However, he knows people who are struggling. “I know drivers who have lost cars or have difficulty paying their mortgages or car loans,” said Garcia.

Jordan Dills-Weaver, 30, works as a security guard at a downtown hotel. He was not part of AARP’s survey but his experience also reflects its results. His credit cards are maxed out, he tries to avoid eating out and he has put off dentist appointments.

“Groceries are expensive. I’m trying to budget so I can at least afford a phone bill,” said Dills-Weaver, who identifies as Black and White.

AARP's survey was conducted in March and the organization released initial findings in August. The analysis released in October that further breaks down the results based on race is still relevant because savings and spending behavior takes a long to time to change, so aggregate results are likely the same, according to AARP.

Inflation is decreasing, yet financial pressures have not eased for many people. Inflation fell to 2.4% in September after reaching an average of 8% in 2022 — the highest levels since the early 1980s. But since February 2020, consumer prices have increased 21.4%, well above the historic average for a four-year period, according to Bankrate, a financial services firm.

“Americans would need about $1,214 to buy the same goods and services that cost $1,000 when the coronavirus-induced recession occurred,” according to Bankrate.