Young Americans say food price inflation affects them most

• Food: 54%
• Rent: 22%
• Discretionary spending: 10%
• Health care: 6%
• Utilities: 5%

Overall inflation has cooled off since its 9.1% year-over-year peak in June 2022, but it continues to rise at a 3.5% year-over-year pace as of March, according to the most recent data available from the consumer price index, which tracks the price of goods and services over time.

Higher borrowing costs are another factor leading to younger people feeling strained, as the average credit card balance for Gen Z and millennials increased 62% and 50%, respectively, between March 2022 and February 2024, according to a recent Intuit Credit Karma survey.

It’s perhaps not surprising that food costs have hit younger people the hardest, considering that they’ve risen by 25% in the last four years, compared with 21% for all items tracked by the consumer price index.

While wage growth has outpaced inflation since early 2023, the significant run up in grocery and takeout food prices over the past four years has been hard to ignore, especially for low-income earners. Younger workers tend to make less money since they are earlier in life, so necessary expenses like food costs can take up a greater share in their overall budget.

“The way people used to cut back on spending on food was to go to eat out less. That is still an option, of course, but with groceries costing so much more, people are feeling more squeezed,” says Carla Adams, a certified financial planner in Michigan.

Consequently, food costs might be felt on a daily basis, compared with, say, rent costs, which have also risen dramatically in the last four years.

Increased food costs have affected low-cost staples like fast food, too, the prices of which have recently exceeded the overall rate of inflation.

“Everyone needs to eat every day, and anything a step above microwave ramen is a small joy that was accessible to many without breaking the bank,” Adams says. “Now, not so much.”

Want to make extra money outside of your day job? Sign up for CNBC’s new online course How to Earn Passive Income Online to learn about common passive income streams, tips to get started and real-life success stories. CNBC Make It readers can use special discount code CNBC40 to get 40% off through 8/15/24.

Plus, sign up for CNBC Make It’s newsletter to get tips and tricks for success at work, with money and in life.