Americans are turning to new ways to cut expenses right now

• Despite easing inflation, many Americans are still looking for ways to save money.
• The high cost of homeownership and smaller pay bumps are among the factors weighing on consumers.
• Travel, car insurance , clothes, and home improvement are areas where people have trimmed spending.

Inflation may be coming down , but Americans are still looking for ways to save money.

Over the past year, many US consumers have spent less on travel, clothes, home improvement , and car insurance, according to surveys, business executives, and analyses of Americans' spending patterns.

For some people, this means seeking out lower-priced clothing, travel destinations , DIY projects, and car-insurance policies. But for others, it's meant delaying or foregoing spending altogether.

This shift is yet another example of how Americans have changed their consumption habits in recent years, in part to combat various economic challenges.

In 2022, US consumers spent a larger share of their disposable income on food than they had in over 30 years, according to data from the US Department of Agriculture. And many people looked for creative ways to spend less at the grocery store , a Numerator poll and a Food Industry Association survey found .

While price growth for food and other expenses have slowed considerably over the past two years, dwindling COVID-era savings , smaller pay bumps at work, and the still high costs of homeownership , childcare , and retirement have continued to motivate consumers to save money.

"People are going to spend, but they're only going to spend when they feel like there's really value there," Ted Rossman, a senior industry analyst at Bankrate, previously told Business Insider .

But where consumers choose to spend their money — and not spend it — is ever-changing.

In 2022, despite rising prices across the economy, many Americans decided that shelling out on experiences and trips was worth it as pandemic restrictions eased. However, in recent months, several travel-industry companies have pointed to " softness " in Americans' travel demand, particularly among lower-income consumers.

To be sure, Americans — particularly high-income people — are still spending at strong levels overall. Additionally, there are some expenses, like groceries , where shoppers continue to look for ways to get around elevated prices.

However, travel, clothes, home improvement, and car insurance are among the areas where many Americans have cut back more over the past year to give their finances a boost.

Here's how this spending shift is playing out.

While plenty of Americans have taken vacations in recent years , there's evidence that the travel industry is in a bit of a slowdown.

A Deloitte survey of more than 4,000 Americans conducted in March and April found that the average traveler planned to take 2.3 trips during the summer months, down from 3.1 in 2023. Additionally, a Bank of America analysis published in May found that average travel spending per US household had fallen by 1.5% over the prior year.

During their second-quarter earnings releases, several travel-industry companies — including Airbnb, Hyatt, Marriott, Wyndham, Expedia, and Hilton — said they expected travel demand to weaken in the coming months, CNBC reported in August.

However, not all Americans have cut back on their travel spending — there's evidence that wealthier consumers have continued to splurge . The travel slowdown appears to have been driven by lower-income Americans.

"They've spent all that money. They're now borrowing more," Hilton CEO Chris Nassetta said on an August earnings call about lower-income consumers. "And so they have less available disposable income and capacity to do anything, including travel."

In August, Disney reported a "moderation of consumer demand" at its theme parks.

"The lower-income consumer is feeling a little bit of stress," Hugh Johnston, the CFO of Disney, said in August.

Financial pressures have led many Americans to shop for discounted clothing , a Bank of America analysis published in August found.

The share of Americans who purchased most of their clothes in the "value" tier — rather than "standard" or "premium" — has increased in each of the past two years to about 30% as of July, Bank of America data showed.

The report said that Gen Zers and millennials were among the demographic groups that had shifted more toward value apparel over the past year.

"Gen Z and millennials are spending more on necessities as they grow older and take on more financial obligations, leaving less for discretionary items," the report said. "And younger generations are still favoring discretionary experiences like travel and restaurants, which leaves even less of their budget for discretionary goods like apparel."

Over the past year, the cost of car insurance has risen by 16.5% , according to the Bureau of Labor Statistics. Only eggs and frozen noncarbonated juices and drinks have had a bigger year-over-year increase, according to the bureau. Car-insurance rates are near the highest they've been in decades.

The elevated costs of car insurance have led more US drivers to go without it, The Wall Journal reported in July, citing the Insurance Research Council. The share of uninsured drivers rose from about 11% in 2019 to 14% in 2022, according to the latest available data from the council .

Initial data suggested that the share of uninsured drivers rose further in 2023, an Insurance Research Council spokesperson told USA Today. Additionally, survey data from the auto-industry research firm J.D. Power indicated that this trend persisted during the first half of this year.

While driving without insurance is illegal in almost every US state , some people told the Journal they were taking the gamble to help themselves afford groceries, housing, healthcare, and other expenses.

Ditching car insurance isn't the only way drivers have tried to reduce their insurance costs. In a J.D. Power survey of more than 10,000 US car-insurance customers between March 2023 and January, 49% of respondents said they had actively looked for a new policy over the prior year. Among those who'd looked, 29% said they had switched insurance carriers.

"After the past few years of steady auto insurance premium increases, customers are no longer passively keeping an eye out for a better deal," Stephen Crewdson, the senior director of insurance-business intelligence at J.D. Power, said in a release published in April. "Instead, they are actively seeking new carriers to offset these rising costs."

Some Americans also appear to be holding off on home-improvement or do-it-yourself projects to save money.

Lowe's same-store sales, a measure of sales at the company's stores that have been open for at least a year, fell by over 5% in the second quarter compared with the same period in the prior year, and the company said it expected its same-store revenues to decline by as much as 4% overall in 2024.

"We're all aware that we have an environment of elevated interest rates and inflation, and because of that, the DIY customer is just on the sidelines waiting for some form of an inflection to take place," Marvin Ellison, the CEO of Lowe's, said on the company's second-quarter earnings call.

Meanwhile, Home Depot said it expected its full-year same-store sales to decline by as much as 4% in 2024.

"It's simply a story of a deferral mindset among our customers who have the means to spend," Richard McPhail, Home Depot's chief financial officer, told Bloomberg in August.

In addition to the inflation of the past few years, elevated interest rates could be making some homeowners less likely to borrow money or rack up credit-card debt to finance their home upgrades.

Have you found creative ways to save money? Are you willing to share your story? If so, reach out to this reporter at jzinkula@businessinsider.com .