Hal Benson felt like he had his financial house in order when he retired in 2022 after 30 years working for the U.S. Postal Service. 

“I planned this all out — mortgage paid, pension ready,” Benson, 63, said. “But everything costs more now than when I first planned my retirement.” He’s considering taking his Social Security early, which would mean losing out on the full benefits he would get if he waited four more years like he originally thought he would.

Minnesotans across the income spectrum said they are changing their spending, saving and investing habits in response to persistent inflation that has weighed on the U.S. economy since 2021. In a delayed inflation report, the Bureau of Labor Statistics said last week that September’s inflation rate rose to 3%, a small uptick from the previous month’s 2.9% and a better-than-expected figure. 

But the report, potentially the last piece of national inflation data we will see until the government shutdown ends, shows that inflation, while not meaningfully accelerating, also isn’t getting significantly better. Wages have risen faster than inflation since mid-2023, but households have yet to regain the purchasing power they lost after years of prices outpacing wage growth. 

Related: Would stopping government overspending ‘end’ post-COVID inflation?

The combination of price and wage pressures leads to nearly half of adults in the United States not having a three-month savings buffer, according to the Federal Reserve Bank of Minneapolis.

Maya Peterson is a teaching assistant in her 30s who rents with a roommate in St. Paul’s Midway neighborhood. Two years ago, she estimates she could sock away about $300 a month. Today, she’s only saving $150 a month, despite taking occasional babysitting jobs on the side. 

It’s like trying to “run up a down escalator,” Peterson said.

Transportation and rent for her two-bedroom apartment in Midway are the expenses she has noticed change the most. Her landlord has passed on rising property taxes and insurance costs, she said.

“Every year it’s just a little more. Fifty bucks (a month) doesn’t sound like much until you realize it’s fifty more forever,” Peterson said.

Naly Vang, a home health aide, has always sent almost all of her savings to her parents in Laos. She used to send $1,000 “every few months,” and when she could she would send even more. Now, she aims to send $700 at the same pace.

“Prices are rising (in Laos) as well,” she said, so her shrinking remittances to her parents don’t go as far as she wishes they would. She’s also started to keep a small savings buffer for herself after seeing friends fall behind on rent or utilities due to an unexpected shift in their income or expenses.

“I have to decide sometimes to keep some extra money with me instead of sending it, in case my hours are cut or something happens,” she said.

Some Minnesotans have left the workforce altogether, feeling pushed out by return-to-office notices and the high cost of childcare. 

For most of the past decade, Danielle Ortega said she and her husband considered themselves “middle-class, even comfortable.” They bought their four-bedroom home in Woodbury in 2017 at a fixed 3.2% rate, about half of today’s average mortgage rate, and they’ve never missed a payment. 

During the pandemic, she was able to work remotely as an executive assistant at a small bank while her husband did the same for his job as a software developer. The flexible schedule meant she didn’t take as much time off for maternity leave when she had a baby in 2022, allowing them to keep saving, especially as their second child was going to enter college the next year. But when they both got return-to-office notices last year they decided it didn’t make sense to pay for childcare and more transportation costs for both of them, so they prioritized her husband’s job.

Meanwhile, Ortega’s career was “paused for a little bit.” How long that pause will be remains unclear. 

“If I go back, we spend almost as much on childcare as I’d earn. If I stay home, we keep falling behind on savings. It’s like the math doesn’t work out either way,” she said. 

Some major costs are locked in, like the $1,200 a month for two kids’ college costs or their “over $2,000” in mortgage payments. So their household has looked to cut out smaller expenses they now consider splurges. 

For example, date nights, a longtime staple of their relationship, are now few and far between. They save by not paying for the restaurant, the gas, the parking, and the babysitter who watches their three-year-old. So for now, “it’s a no-brainer,” though she’s hopeful they can return to their old schedule when she can find a job that justifies the childcare costs, or after their toddler reaches school age.

Though lower-income and middle-class households are hit hardest, even wealthier Minnesotans are making moves to cope with inflation.

“I can take the hit, I’m fine,” said Mark Ellison, whose family’s combined household income is somewhere between $250,000 and $300,000. 

However, that “hit” does cause him to think twice before making big purchases and to scrutinize even routine expenses, like groceries, more closely. He said he has noticed himself gravitating toward more store brand options instead of name brand groceries and household items. 

Related: ‘Everything on pause’: Interest rate cut can’t spark housing market burdened by uncertainty

With much of his savings tied to the stock market, he has also looked to more actively manage his portfolio, aiming to “diversify while taking on minimal extra risk.”

For other Minnesotans though, inflation goes well beyond an occasional annoyance and requires more than just keeping an eye on Wall Street’s performance. Those not in the highest income bands need to make sacrifices today in order to either attain financial stability for tomorrow or maintain the lifestyle they had yesterday. 

Benson, the retired postal worker, feels like the life that he planned and worked for is slipping away. In addition to thinking about taking Social Security early, he decided to keep his classic Corvette in storage this summer instead of paying to clean it up and feed it premium gas, and he is considering selling the condo he bought seven years ago in Arizona. But one budget cut bothers him more than the others.

“I don’t buy the grandkids big gifts anymore. … I just take them out for ice cream when I see them,” he said. 

“They don’t care, but I do,” Benson said. “That’s when it hits you that you’re trimming joy, not waste.”

Editor’s note: This article originally appeared on MinnPost and was written by Shadi Bushra, MinnPost’s data journalist. It is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.

MinnPost is a nonprofit, nonpartisan media organization whose mission is to provide high-quality journalism for people who care about Minnesota.