Americans’ savings fall amid inflation

Surging levels of inflation and the COVID-19 pandemic have eaten into savings as, on average, Americans have seen their nest eggs shrink by $9,000 compared to a year ago, according to a study.

The average amount of money sitting in a personal savings account fell 15% in the past 12 months — from $73,100 in 2021 to $62,086, according to financial services company Northwestern Mutual.

The firm commissioned a survey of 2,381 Americans between Feb. 8 and Feb. 17.

Of those polled, 60% said that the pandemic has been “highly disruptive” to their finances, although nearly half, 48%, said they have been able to adapt to the new circumstances.

“There could be several factors contributing to the drop in savings from last year, ranging from spiking inflation to people spending more as they resume some sense of normalcy in their lives,” Northwestern Mutual chief customer officer Christian Mitchell said.

The uncertain times have forced a growing number of Americans to change their financial habits, according to the study.

Nearly three-quarters, 73%, said their financial habits have improved since the onset of the pandemic.

Thirty-five percent said they’ve been more inclined to reduce spending and living costs, while 22% said they have worked to pay down their debts.

Another 19% said the pandemic has compelled them to increase their investments, while 17% said they regularly revisit financial plans.

Inflation has skyrocketed from a year ago, having soared to 8.3%, near a 40year high.

Prices across the economy are soaring at their fastest pace in decades.