A new year often brings about change, and unfortunately some changes are not as welcome as others. In the upcoming months you may notice that you are shelling out a little more cash on everyday purchases. Not only are price increases being predicted by some indices, some are even mandatory.
Don’t fret just yet! Although some things are increasing in price, there are always ways to figure out how to save in other areas. With the help of some smart money management and spending awareness you may be able to keep your wallet from taking a huge blow.
As if it wasn’t frustrating enough to watch the price tags at the grocery store climb higher, the United States Department of Agriculture released a report saying that 2012 will bring even more food inflation. It’s not all bad news though; the inflation is reportedly less severe than that experienced in 2011, which means — macroeconomic factors permitting — store and restaurant owners may even consider holding off on raising prices.
Coffee: On a related note, Starbucks will be increasing the price on some of their drinks by 1%, to battle the increasing costs of coffee. This increase comes as a surprise considering that a recent reform passed under the Dodd-Frank Wall Street Reform and Consumer Protection Act capping debit card fees for merchants at $0.12 cents per transaction should have led companies like Starbucks to lower their prices.
How to fight it: When shopping at grocery stores make sure you are a conscientious shopper. The best advice is usually the easiest – make a shopping list before you head out and stick to it. If you have time, try comparing prices of the items you have on your list. The best way to compare prices is by looking at the unit price and how many ounces (or whatever measurement) it contains.
The struggling airline industry has spent the majority of 2011 looking for opportunities to keep profits up, unfortunately some of these ideas have come at the expense of their customers. While international flights are expected to decrease in price, domestic are expected to increase.
How to fight it: Sometimes traveling by plane is unavoidable, but there are a few money saving tips that can make up for the added cost of travel:
- Flying on the cheapest days (Wednesday, Tuesday, Sunday).
- Shopping approximately 3-4 months before your travel date and looking for tickets on Tuesday afternoons, when they are priced lowest.
- Also, signing up for an alert service that sends you emails with fare drops can never hurt!
As an avid letter writer, this one particularly annoys me. When buying stamps this weekend, my local postman informed me that the cost per stamp would soon be going up from $0.44 to $0.45 on January 22, which prompted me to look into other potential postage increases for 2012. Sure enough, USPS has announced an average increase of 4.6% across all shipping classes for 2012. To read about all of the increases check out this blog post by stamps.com.
How to fight it: There isn’t much you can do if you or your small business relies on shipping across the country. The reason the USPS is struggling is because of technological advances converting people to digital mail and payment services to replace their sending-needs. The best way to “fight” these charges is to be more efficient when it comes to sending packages. Here are a few tips I plan to use:
- Not waiting until the last minute. Avoiding the need to pay for rush shipping by using the lowest shipping speed.
- Taking advantage of free envelopes, boxes, tape, and labels when you ship with USPS Priority Mail or Express Mail.
- Reusing holiday gift boxes. I received a ton of gifts by mail this holiday season!
- Priority Mail Flat Rate boxes. You’ve probably seen the commercials, but don’t shrug it off, it could be a huge cost saver if it makes sense.
- Sticking to light packing materials. This is one of those “duh!” moments when you see your postman weighing your package.
With the volatile state of gas prices over the past few years, I don’t think anyone is surprised about this one. A price hike is annoying, but not as permanent as some of the other increases mentioned. The reasoning behind this particular hike is actually due to Congress’ decision not to renew a federal subsidy on ethanol, causing it to expire this past Sunday. Don’t be surprised if you see prices once again hitting $4 per gallon.
How to fight it: Let’s face it, if you were ready for a lifestyle change such as riding a bike to work or taking the bus, you would’ve already done it. Instead, focus on scheduling your time and trips more efficiently. At the same time, by changing your driving methods with using cruise control, reducing the weight in your car, and avoiding any idle time you will be able to save on gas. Also, avoid fuel evaporation by making sure your fuel cap is closed all the way and not damaged.
Unfortunately, this isn’t where the price increases stop, as some states are upping municipality and tap water fees among others. Though all this news may seem disheartening, consider this an opportunity to fine tune your spending habits in 2012. You may find you’re in better shape for the next time our everyday purchases decide they need a price lift.