Nearly 20 percent using savings to buy groceries, with credit card use rising: Analysis
How Consumers Are Funding Grocery Purchases as Prices Rise
Nearly 20 percent using savings to buy - A significant portion of American households are turning to emergency funds for daily necessities. According to new research from the Urban Institute, nearly 20 percent using savings to buy groceries has become a common strategy amid rising food costs. The analysis, based on December 2025 survey data, shows that 19.6 percent of working-age adults tapped into savings meant for other purposes to cover food expenses. This trend highlights how families are adjusting their financial priorities when faced with persistent inflation.
The survey, part of the institute's Well-Being and Basic Needs study, captured shifting payment behaviors across different demographics. While many consumers continue relying on traditional payment methods, the growing reliance on savings accounts signals underlying financial stress. Households that once kept their emergency funds untouched are now redirecting those resources toward essential purchases like groceries.
Payment Methods Show Mixed Results
Credit cards remain the most popular choice for grocery shopping, with 63.2 percent of respondents using them regularly. However, not everyone manages their balances equally well. Slightly more than half of cardholders pay their full statement each month, avoiding interest charges entirely. Meanwhile, over 30 percent choose to make minimum payments while carrying a balance, and nearly 14 percent occasionally miss their required minimum payments altogether.
The latter group represents 8.7 percent of all survey participants, up from 7.1 percent in 2023. This increase suggests that some families are experiencing greater difficulty keeping up with their financial obligations. Additionally, buy-now-pay-later platforms have attracted nearly 10 percent of grocery shoppers, though one-third of those users reported missing at least one payment in the past year.
Food Costs Continue Their Upward Trajectory
The Bureau of Labor Statistics reports that food prices increased 3.1 percent year-over-year as of May 2025. Home food purchases rose 2.7 percent, while restaurant meals became 3.5 percent more expensive. Grocery-specific prices climbed 2.2 percent during the same period, following a brief slowdown when annual inflation for home food dropped to 0.9 percent in August 2024.
Over the last five years, the cumulative impact has been considerable. Food costs have grown approximately 32 percent overall, putting sustained pressure on household budgets. This long-term trend helps explain why consumers are increasingly willing to dip into savings rather than rely solely on credit or current income.
"The evolving payment landscape coincides with persistent increases in food costs nationwide," noted analysts reviewing the data.
Government Programs Respond to Rising Costs
Policy changes are also reshaping how Americans access food assistance. The One Big Beautiful Bill Act introduced new work requirements and removed certain exemptions from the Supplemental Nutrition Assistance Program. As a result, at least 3.5 million people lost SNAP benefits by February, according to BenefitsUSA. These changes come at a time when more families are already stretching their finances to cover basic needs.
The Trump administration has taken additional steps to address elevated food prices. The U.S. Department of Agriculture pledged up to $500 million to assist small- and medium-sized meat packers. Agriculture Secretary Brooke Rollins stated that this investment would promote long-term affordability at grocery stores, helping to stabilize prices for consumers navigating ongoing economic challenges.