(photo by Jean-christophe Gougeion on Unsplash)
Prices for things we buy always seem to go up. Did your parents or grandparents ever say, “when I was a child, a candy bar only cost a nickel”. The cost of tolls on highways and bridges, train and bus fares, and parking meters inevitably goes up. They never drop. The price of gasoline fluctuates, but inevitably is most expensive during the times of year that we drive the most.
These price increases on their own would not be terrible if our annual salaries increased at a higher percentage than these expense price increases. Then we would still have money leftover. But for most workers, the cost of living always seems to increase at a higher rate than our annual salary raises, if we are lucky enough to get a raise at all.
Inflation is “a general increase in prices and fall in the purchasing value of money” (Oxford Dictionary).
I realized quick that home ownership had hidden costs that never go away. When I first purchased my home, I did not realize that property taxes would go up every year. I thought that my fixed mortgage would be just that, fixed. Wrong.
Expenses can grow quickly if we do not pay attention. Cable companies reel us in with a special low price for the first three, six, or twelve months. And then the real, higher price kicks in. The vendor may even bump up prices at random times without notice. If we do not pay attention, these expense increases can go unnoticed for months before we realize what has happened. We must be vigilant towards keeping our expenses in check. Sometimes that means calling a vendor to complain and demand a better price.
Food is another cost that continues its upward trend. Spend fifty or one hundred dollars at the supermarket. And upon returning home to empty the grocery bag contents on the counter, we realize that the expensive cost did not procure much food. And the kicker is that the size of many products have mysteriously gotten smaller. So we not only pay more for the same product, but we get less product than before.
These inflation issues were already around pre-Covid. But the pandemic has added an extra layer of inflation. With many companies shutting down, especially at the beginning of the lockdown, many goods stopped being produced, while the demand for these products skyrocketed. Low supply combined with high demand means that companies will raise their prices because they know that many consumers will be willing to overpay to procure their desired products.
I wish that I was a consumer that did not have to care about price, so I could obtain things I desperately need right now during the pandemic. But my accountant brain seems to kick in whenever I see the higher-than-normal overpriced costs. I’ve been shopping for a car over the past year, and for a computer over the past few months. And I have yet to find what I’m looking for at a reasonable price. In my mind, the reasonable price of pre-covid was still expensive, but even that price would look good right now.
I have been using two old computers that don’t work as well as they used to. Actually one broke down a few months ago. And the one remaining computer runs through its power very quickly if it is not plugged in to electricity. And it also overheats at random times.
The car I drive is over twenty years old. Both last year and this year, the car has needed a lot of repairs. And while it is working okay right now, who knows when the next issue will arise, perhaps leaving me car-less.
For both of my desired purchases, car and computer, there are shortages of both in the marketplace because there is a shortage of computer chips. And the prices for each are astronomical, also due to this shortage. Today I searched online for a computer and finally found one that met my specification requirements, only to see that it would be delivered by September 30. That’s two months out! And the price was still full price, plus the Covid inflation cost added on. I will continue my search through Labor Day, with hopes of finding either a back-to-school or Labor Day sale.
And as for car shopping, ugghhh! Have you noticed the shortage of vehicles in auto dealership lots? My part-time job location has a window overlooking a Ford dealership. Pre-Covid, their parking lot was packed with vehicles. Now they have many less vehicles that they space out in the lot to make it look like there are more than there really are. To recap, there is a shortage of NEW vehicle inventory due to a chip shortage, which has caused the price of NEW vehicles to skyrocket. And because of these high prices for NEW vehicles, many car shoppers are switching their search to USED vehicles, which has caused the price of USED vehicles to skyrocket.
In conclusion, the Federal government (and others) believe that our current inflation situation is “transitory” or temporary. I don’t buy it, but time will tell. If this inflation is transitory, then prices will roll back to pre-Covid pricing within a few months from now. The longer that inflation sticks around, however, the more likely that it is not temporary, and will continue on. This will bring about more pain to the economy, and more hardship for us, the individual consumers. Remain vigilant with your expenses. Spend wisely.
