Are you feeling shocked at how expensive your regular expenses are? Well, you’re not alone. Many Americans are feeling the burn as the price of daily goods increases due to stimulus checks and supply chain shortages. As the economy gets back on its feet after the COVID-19 lockdowns, inflation will likely stick around. However, inflation isn’t affecting all goods equally, meaning some spending sectors will see greater price increases than others. Let’s dive into what exactly these goods and services are so you can best prepare to avoid their high costs.
Travel
The cost of traveling has increased immensely. The air-travel industry got hit hard during the pandemic, and they continue to struggle. Now, as supply chain shortages affect the ability to repair and maintain aircraft along with increasing oil prices, the airfare costs continue to skyrocket, not to mention the lengthening flight delays that make air travel a misery. If you were thinking of visiting a relative or friend by plane, now may not be the best time to do so.
Home Repair
If you’ve been eyeing home improvement projects like a kitchen or bathroom renovation, you might be disappointed when you add up their costs. Prices of raw materials have increased drastically over the past few months, especially for materials such as lumber, steel, and copper, which are common materials used in renovations.
In addition, many home builders are adding escalation clauses[1] due to the increased prices of materials to the tune of 12.4 %, as reported by the Bureau of Labor Statistics.[2]
Cars
For many of us, cars are the mode by which we navigate the world. Whether we’re commuting to work every day, going out to meet a friend, or taking a weekend trip, cars get most of us from A to B. Unfortunately, due to increasing gas prices and supply chain disruptions, the cost of getting ourselves to where we need to be is increasing rapidly. If you recently had a malfunction or needed a part replaced, you may have had to pay much more than you did 12 months ago and possibly had to wait days or weeks for your part to arrive. Each time you fill up that gas tank, you’ll likely see increased costs. Although it’s a steep ask, cutting back the use of your car may help you decrease the effects of inflation on your wallet.
All in all, inflation presents unique risks, but it’s not impossible to mitigate its effects. In fact, inflation may be affecting your retirement portfolio as we speak. There’s no better time than now to talk to a financial advisor about how you can protect your retirement portfolio from the erosion of inflation. Click HERE to sign up for a time to meet us at LakePoint Advisory Group.
[2] https://www.bls.gov/news.release/pdf/ppi.pdf
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