Inflation is a big news topic these days. Every time we turn on the radio or TV we hear about record high prices for gasoline, food, or some other commodity. Even more than fears of viruses spreading among us, inflation can wreak havoc on our futures. Not only do high prices make daily living difficult, but inflation can severely impact the value of our savings.
An immediate impact of inflation is the price of gasoline. Gas prices are on the rise, as you notice every time you fill up. There is a lot of debate over where gas prices will be at the end of the year. Political unrest in other parts of the world impact oil prices. Rising oil prices impact almost everything else we buy. Your vehicle needs fuel. Shippers need it to deliver goods to stores or directly to consumers. Most manufacturers must buy fuel to produce those goods. Companies are forced to cover their increased costs by raising the prices of their goods. Unfortunately, there is not much you can do about fuel price increases other than shop around for the lowest prices. Seek out the lowest-priced gas stations near you, perhaps by using a gas-finder app. Buying from the cheapest gas station near your route may save you a small amount with each fill-up. Over a year, those few dollars (or even a few cents) will add up since most of us buy at least a tank of gas a week. Remember, there is almost no difference in gasoline quality from brand to brand, so it pays to buy the lowest priced.
Food is another big expense. We all must eat. Everything from staples like milk and bread to treats like cookies and candies are seeing price hikes caused by shipping issues and supply shortages. If you are living on a budget, go back to the basics. Shop sales flyers and clip coupons (paper and electronic) to help keep costs down. It is easier to buy and plan menus around what is on sale than to plan the menu first and then try to find the items on sale. Be sure to stock up on non-perishable staples when they are on sale since you will use them and save money in the long run. Making some lifestyle changes can help too. It is much cheaper to drink water or tea than sodas. Also, try store-brand frozen items. Remember that they are produced by the same manufacturers as the more expensive brands.
Restaurant prices are also increasing. Food availability is as much an issue for restaurants as it is for the rest of us. Many restaurants have had to lay off staff during the last couple of years. Now that the restaurants are open again, there is a need for cooks, servers, hostesses and bussers. Unfortunately, many former employees have moved on to other occupations. Since staffing demands now exceed supply, salary rates must be higher to get staff onboard to work the needed shifts. Like with buying food for home, look for specials that give you more for your dollar. And don’t forget, if you can’t eat all the food you are served you can take home leftovers for a tasty lunch tomorrow.
Clothing is another item that is more expensive this year. Now that people will be going out in public more, retail clothing suppliers may make a full recovery. Supply issues, however, could make prices higher, partially because materials are more expensive. The best way to compensate for this problem is to shop sales and manage what is already in your closet. You can also save a lot by shopping end of season clothing instead of the newest items when they first come out.
Home heating is also increasing in price. Unfortunately, all resources used to run a home (heating oil, propane, and electricity) are expected to increase this year. The best way to combat this increase is to work on creating a more efficient home. Lower the thermostat in the winter, wear warmer clothing, and use blankets to stay warm in your home. In the summer, raise the thermostat, wear cooler clothes inside, and use fans to help stay cooler. Turn off any lights and electronics when not in use. Most people leave their computers, streaming devices, game systems and other such electronic devices on all the time. While each device is not using much power on its own, over time and with so many devices in each home, leaving these devices powered will add up to higher electric bills.
Electronics of all kinds (smart phones, tablets, home computers, game systems, etc.) are going up in price due to a chip shortage creating a supply shortage for these devices. We all experienced shortages and long lines for game systems at Christmas. Finding the system at all was the challenge so the price was almost irrelevant if you wanted it. Even when the supply of chips catches up with demand, there will still be a lag in getting them into the devices and those devices to the consumers. Experts predict prices for these items will not go back down even after supply catches up with demand. Try to use upcoming sales (Super Bowl Sunday, President’s Day) to look at buying the closeout systems that retailers want to get rid of to make way for the newest versions to be released this year.
New and used cars and trucks are at an all-time high and expected to continue to rise, so now may not be the best time to buy a new vehicle. This problem is in part due to the chip shortage forcing manufacturers to limit production, which increases demand for both new and used vehicles. The upside is that selling values for used vehicles is also at an all-time high. If you have a vehicle you don’t want to keep, now is a great time to sell it.
The housing market is a complicated problem. As the federal funds rates are increasing, interest rates for loans will likewise start to increase. Right now, mortgage rates are at record lows. With demand for homes so high, there is a lot of competition for buyers. Choosing your dream home may be more limited with other buyers trying for the same home. Once the rates increase, the competition for buyers will die down eventually. The catch is that when homes become easier to buy, the overall cost will be higher due to increasing rates for financing. If you plan to move, you will need to weigh what is more important to you, a lower monthly payment for a home which may not be your first choice or a higher monthly payment for your ideal home. Usually, when demand goes down, housing prices should too, but there are predictions that housing prices will continue to rise during 2022. Given that rent is also increasing, and the eviction moratoriums have been lifted, if you are renting, you may still find buying a good option. If you own your home, now is a good time to stay put unless you need to move to another location. While you will probably sell your old home quickly for a good price, finding a new home at a good price is getting harder to do every day. One extra tip: if you need to buy a home, go ahead and pre-qualify with a lending institution. This will sometimes give you a guaranteed rate for a certain amount of time (rates are rising so anything to slow that down) and being ready to buy when you make your offer will make you more attractive to sellers because you can close faster.
Many homeowners have renovated and redecorated their homes recently, even at a time when building supplies were in short in supply and very high demand. The shortage of materials coupled with shipping problems made furniture and other home renovation necessities very expensive on their own. Since these issues have not been resolved, furniture prices are expected to continue to rise. If you want to improve your home, focus on decluttering, reorganizing, and putting on a new coat of paint. And to make an older house look as good as new, make sure you have clean floors and furniture. We at ServiceMaster of Gwinnett and ServiceMaster 5 Points Athens, are ready to help make your home look clean and beautiful. Give us a call if we can help.
