A majority of Americans say inflation is pushing them off track financially, redirecting their attention to short-term goals like increasing their income and making it almost impossible to save for retirement or a child’s college education, a Thrivent survey found.

The Consumer Financial Outlook Survey, the outcome of a partnership between Minneapolis-based financial services company Thrivent and Washington, D.C.-based data company Morning Consult, revealed that 59% of Americans feel like they’re living paycheck to paycheck, and 78% said they wished they had more breathing room in their finances, primarily because of the pressure inflation is putting on their wallets.

“When people see the cost of groceries at the store and gas at the pump, they can see the impact of inflation. Those are areas where people know what things used to cost, and so they feel the effect of inflation very directly,” said Nick Cecere, senior vice president and chief distribution officer at Thrivent.

What’s worrying, Cecere said, is that 76% of survey respondents said they’re being pushed off track financially by inflation to the point where 60% said it’s getting in the way of saving. Only 28% said they were saving enough right now.

And consumers’ response to the current economic environment may end up inflicting long-term damage on their financial security as they forego future goals in order to make the present easier. For example, the survey found more people are trying to increase their income (36%), sock away some emergency savings (31%), and pay off loans/debt (23%) and credit cards (22%) than are sticking to plans for retirement savings (20%), investing (13%), creating a financial strategy (8%) and earmarking funds for a child’s education (6%).

“A lot of folks are paying off loans because it’s important to get rid of that,” Cecere said. “But this is a great time for clients to get into that intentional planning that they may have procrastinated on. They need to look at how they’re spending their money. In many cases, they’ll wake up five years from and realize they don’t have money to send their child to school.”

Of course, knowing where the money is going—budgeting—is one of those key pillars to good financial planning that almost every client would agree makes a ton of sense, but very few are able to do. Living within one’s means, automating savings and having a goals-based strategy are three other areas rife with disconnect, the survey found:

“Part of that chasm between knowing it’s the right thing to do and doing it is a confidence issue. It’s a challenging financial environment out there, and what we try to help clients address is what they can control,” Cecere said. “We’re saying to our clients, you can’t control the markets, but you can control to some degree what you spend and save.”

In some ways, he said, that chasm isn’t all the client’s fault—the last 10 years of low or zero interest rates created a habit of floating some expenses with debt and credit cards, but interest rates change a lot faster than human behavior.

“It’s often a behavioral issues more than an actual money issue, and if an advisor fails them in that respect, they don’t have a chance. Once they get off track, it’s a lot harder to get back on,” Cecere said. “That’s why this profession is such a benefit to the public. We’re helping people succeed financially, just like a physician will help them succeed medically.”

That kind of guidance is more important for younger clients, as comparative data between Boomers and Gen Z found that Boomers were far more able to adjust to belt-tightening, the survey found.

For example, Boomers were:

The divide makes sense when these two generations are viewed through the lens of the social and consumer pressures of their times, Cecere said.

“They come from two different worlds, in a way. The world of Gen Z is more product-driven, consumer-driven and brand-driven. Boomers didn’t grow up worrying about whether they were grocery shopping at Walmart vs. Wegmans, so it’s easier for them to make adjustments,” he said. “The next generation didn’t grow up in the Boomers' world, so they just don’t have the discipline a Boomer has.”

They’re also not feeling the impact on their finances as strongly, the survey found, as only 38% of Boomers said they felt price increases had impacted their financial goals. This could partially be due to the fact that most Boomers have an established financial strategy they can lean into.

As a financial services company, Thrivent and Thrivent affiliated advisors believe that clients can come to them at any stage in life and benefit from their relationship with their advisor. Yet people often assume that their problems with money or lack of money is a barrier to receiving help, the survey said. The majority of respondents (52%) said they would seek out financial planning advice if they had more money.  

To address this, Thrivent developed a program, called Money Canvas, that the company launched in 2019 to help people across the U.S. handle their money better. To date the program has served more than 2,900 families and delivered more than 6,200 free coaching sessions.

“We developed this program to reach a segment of the population that an advisor is not going to reach. There are clients who don’t feel they’re ‘worthy’ of dealing with a financial planner because they don’t have money, or a 401(k) rollover,” Cecere said.

Through online coaching, the Money Canvas program takes users through three 1-hour sessions designed to building healthy budgeting, saving and spending habits. The plans are personalized and actionable, and while it does introduce the user to a financial planner, it does not include sales pitches.

The survey was conducted in May and polled 2,221 adults across the country. The data were weighted to approximate a target sample representative of the U.S. in terms of age, gender, ethnicity, income and geography.