Consumers Adopting Different Strategies: Understanding the Number of Buyers Bracing for Potential Economic Downturn

Rewritten Article:

Americans are fretting about their ability to maintain their lifestyle due to surging inflation rates since 2021. With renewed financial anxieties following President Donald Trump's tariff measures, many people are ready to take action.

As many as 83% of consumers admitted they would drastically cut back on non-essential spending if their financial status worsens, according to a study conducted by Intuit Credit Karma, polling over 2,000 U.S. adults in April.

On TikTok, frugal living tips, such as using hashtags like #no_buy, #slow_buy, #low_buy, and #underconsumption, have gained massive popularity, particularly among young adults. These trends advocate for making the most of what you already own and resisting the urge to buy excessively.

Navigating the Buy Challenges

The "No Buy 2025" initiative prompts shoppers to avoid all non-essential purchases for the entire year, including items like clothing, books, electronics, and entertainment. Alternatively, the low buy and slow buy movements recommend adopting a more thoughtful approach to spending, such as following the "48-hour rule" before making any non-essential purchases and limiting overall spending due to growing concerns about a potential recession.

Data from H&R Block's Spruce further reveals that 68% of Generation Z consumers are influenced by social media financial trends, with over one-third specifically seeking financial knowledge on the platforms. (Young adults in America are increasingly airing their financial frustrations on social media simply for a laugh, viewing so-called recession indicators with skepticism.)

The Appeal of the Savings Challenges

Clearly, Americans are feeling the impact of escalating prices, with numerous reports suggesting many have depleted their savings and are relying on credit cards to make ends meet.

With recent tariffs now coming into effect, concern about the rising cost of goods and maintaining affordability is at an all-time high, especially given the economy's more recent signs of contraction.

"Consumers are going to bear the brunt of the price increases these tariffs will cause, and there is no way around it," said Eugenio Aleman, Raymond James' chief economist. "The only alternative is to reduce consumption, particularly discretionary items."

In a survey by Gallup conducted during a period of intense market instability following the Trump administration's announcement of new tariffs on most trading partners, 53% of consumers said their financial situation was worsening, while just 38% reported improvement. Additionally, 57% expressed worry about struggling to maintain their standard of living.

Recommendations

Experts argue that TikTok's latest financial trends can provide a short-term relief to help achieve some savings targets, but they emphasize that it's no substitute for developing good long-term habits.

"Don't emulate others' financial decisions," advises Daniel Milan, managing partner of Michigan-based Cornerstone Financial Services. "That's a fundamental principle for any household."

Milan advocates for creating a budget as the cornerstone of financial planning. "People dislike that term," he says. "Instead of hopping on the latest TikTok trend, sit down and carefully evaluate your expenses."

Milan suggests highlighting expenses that can be slashed and distinguishing between wants and needs. Milan himself successfully cut out $800 in recurring bills and overlapping subscription services by taking this approach at the start of this year after getting married.

"Such an exercise can have a profound impact on your cash flow," he remarks.

A Better Path to Financial Well-being

Financial experts maintain that TikTok's latest microtrends can provide a temporary lift to help reach certain savings objectives but stress that they're not a substitute for developing long-term, prudent financial practices.

"Block out what others are doing with their money," advises Milan. "That's a very essential tenet for any household."

Milan advocates for budgeting as the starting point of financial planning. "People are resistant to that word," he says. "Instead of following the latest TikTok trend, settle down and meticulously evaluate your spending habits."

Milan recommends identifying expensive habits that can be eliminated and differentiating between needs and wants. Milan's self-imposed budget overhaul at the beginning of the year helped him cut out $800 in monthly bills and redundant subscription services.

"Such an exercise can have a dramatic impact on your financial well-being," he emphasizes.

Consumers Adopting Different Strategies: Understanding the Number of Buyers Bracing for Potential Economic Downturn