(KELO)–Inflation slowed to 3.2 percent in October, a vast improvement from the 7.7 percent the nation saw last year.

While many are hopeful the drop in inflation could mean an end to interest rate hikes, in tonight’s Eye on KELOLAND, we examine how local families, business owners and nonprofits are feeling the strain of trying to fix the economy.

Aubreanna Cade is celebrating a big birthday.

“I’m three,” Aubreanna said.

Her three-year lifespan is about how long the nation has experienced rapidly rising inflation.

“Well, things have definitely gotten a lot more expensive. Food is way more expensive, going out is way more expensive,” dad Valentine Cade said.

Some families say they’re still buying all the same things, it just comes with a higher price tag.

“You’re used to spending like 100 dollars and now you’re spending about 150 dollars or more,” mom of three Heidi Pettit said.

Others have had to make major cuts to keep up with the essentials.

“We used to go camping all the time, there’s no camping, buying presents for the grandkids, surprises, vacations, there just isn’t any. WE just go to work and we come home,” PJ Stoner said.

PJ Stoner and his wife don’t have any kids living at their Canton home anymore, but they’re still making big changes to cut back on their grocery bill.

“We’re forced to come to Sioux Falls and come to Fair Market and little stores like this to help us get through week to week or get through our monthly budget,” Stoner said.

Nonprofits like Feeding South Dakota and The Banquet are seeing an uptick in the number of people seeking assistance and are also feeling the impact of the rising costs to help feed those in need.

“People are getting more conservative with where they’re spending their money, because they’re worrying about the basic necessities so the eating out or buying the extra shirt or going shopping for the weekend, people are cutting those expenses out right now to make sure they have enough at the grocery store,” Papa Woody’s owner Lisa Esser said.

Restaurant owners and retailers are also feeling the impact of people tightening their budgets.

“Sadly that doesn’t help us retailers who have items that aren’t necessarily needs, they’re more of extras, little perks to make life a little more enjoyable,” DART Boutique owner Leslie Dolby said.

“Some of that I think is the effect of inflation weighing on household budgets that maybe haven’t fully adjusted to reflect inflation in income,” Dr. Joe Santos said.

Joe Santos is the director of SDSU’s Ness School of Management and Economics. He says along with the natural economic consequences of wages not keeping up with inflation, households are also facing the double and intentional burden of rising interest rates.

“This is the ugly underbelly of monetary policy when it’s trying to lower inflation. The only instrument or tool that the monetary authority has is the interest rate,” Santos said.

Santos says the financial strain families and business owners are experiencing is exactly what the central bank was trying to achieve over the past two years of rate increases.

“The way you get them to stop bidding up prices is to get them to stop shopping so vigorously, so those retailers are going to see the ugly underbelly of demand destruction,” Santos said.

While the drop to a 3.2 percent inflation rate last month is a sign this economic maneuver is working, it also has real-life consequences for individual families and businesses.

“We’d like to write it down and say this will be the day, we just don’t know, it’s year to year for us,” Stoner said.

For employees like Stoner who have their eye on retirement, this economic slowdown could delay their plans by a few more years.

“I just know we’re not going to be able to retire when we were hoping to retire, we were hoping to retire at 60, but going to retire with the rest of the country at 65, 66, 67,” Stoner said.

“We’re definitely hearing more and more about being on the edge of a recession,” Pettit said.

Other families are changing the way they invest or holding off altogether.

“We’d like to start doing more things with investment properties, something we’ve put on the back burner because of the way the mortgage rates are,” Pettit said.

“Our biggest expense right now being full-time college students is daycare, daycare is pretty expensive,” Jade Cade said.

Rising costs have Jade and Valentine Cade deciding to put off giving Aubreanna a little brother or sister far longer than they originally planned.

“Probably won’t have another one for about 5 years or so, that’s our game plan,” Valentine Cade said.

While people of all ages may be feeling some kind of financial strain right now, financial experts hope this temporary tightening is leading to a healthier economy, and so far, Santos says spending, income and unemployment are holding steady without dipping into a full recession.