The consumer price index rose to 7% in December, the highest it has been since 1982.
We all see prices rising with higher heating bills, increased food prices not to mention the cost of gasoline which has close to doubled. These costs flow into the price of everything else that heats up inflation. Mortgage rates have jumped this month, the average 30-year mortgage went from 3.08% to 3.54%. While Social Security had a cost-of-living rose by 5.9%, Medicare costs also rose, eating away most if not all of that increase.
What can we do to maintain our life style? This time around it could be more difficult than it was in the 80s. Merely switching brands to less expensive items may not be possible due to supply chain problems and while not empty store shelves, there are fewer choices. Restaurants are downsizing their portions, packages are “shrinking” to maintain price levels. The takeout meals we enjoyed to break the monotony of not being able to go to restaurants may need to be fewer. Restaurants may also be put on the “seldom” list.
It’s time to become creative! You can have the quality of life for a lower cost, when you pay attention and make some minor changes. Bring out those cookbooks and search for economical meals. Search for sales and bulk buying that costs less. Making your own coffee or tea and using a travel mug can save $3 to $5 a cup and then there’s large savings to “brown bag” your lunch or muffins. Try to combine errands to save gasoline, maybe carpool or take public transportation when available. Soon we can spend more time outdoors and maybe go back to the office, then we might cut back on cable service especially those premium channels. It could be time to go on YouTube and learn how to do some home repairs yourself. If you are thinking of downsizing, now is the time with a shortage of housing, remember that mortgage rates will go up with interest rates. If you downsize, you can get an increase of cash and lower your housing costs. And perhaps think of a less lavish vacation, wedding, party or weekend getaway house rental. This is the ideal time to go over your budget and see what “wants” can be cut back or eliminated.
Anja & Clare
