306- The Living Cost Crisis: Has it Impacted Your Household?
Living costs are going through the roof! Inflation at 8%, the supply chain issues, the war in Ukraine and the disfunction in Washington are increasing the living cost budgets of households in a major way. Wages have only increased by 5.6% according to the Department of Labor. For most households, wages have not increased to offset increased living costs.
Let’s look at where these living cost increases are coming from. Here are the major items:
For the latest reports from the government reported overall living cost inflation in the 8.5% range, which is the highest level in 40 years.
The USDA just reported that it expects 2022 food costs for home consumption to increase between 4.4% and 5.5%. At the same time, it reported that the same costs have increased 7.9% for the year ended in February 2022. I can’t believe their projection for this year. I want to ask them to go to my local supermarket and see the large increases for meat and other staples.
Heating and cooling costs are increasing at rates in excess of 20% in parts of the country. For individuals using utilities that generate electricity using natural gas you may be experiencing increases of 25% or more.
Transportation costs are increasing rapidly. Gasoline prices for the 12 months ended in February are up 38% with per gallon with prices hitting $4 to $6 per gallon depending upon where you live.
Housing costs are up at least 7% or more in most parts of the country with rents in certain areas having 15% or more annual increases according to the website Realtor.com. Overall, housing costs are becoming more and more unaffordable for households.
Vehicle insurance costs are increasing around 5% nationally (with higher increases in certain geographic areas) due to higher prices to repair and replace damaged vehicles.
The continued rise of healthcare costs with expected increases of 5% to 7% being reported.
After seeing the reality of price increases that we are all experiencing, your household has the challenge of trying to keep your pre-pandemic and inflation lifestyle while managing your cash budget. This means you will likely need to better manage your spending and look for ways to increase your income. Extra diligence is essential to accomplishing this.
The living cost crisis is real and is impacting every household in one way or the other. For the foreseeable future you need to pay extra attention to managing your living costs and the spending decisions you make. To help you in your efforts, we have created a special website offer: 50% off our book, The FinancialVerse Guide to Savings – 600 Practical Cash Savings Ideas.
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We believe you can save at least $600 in annual savings by using ideas presented in the book. Have fun saving money!