When I read an article in The Atlantic entitled, “Why America’s Essentials Are Getting More Expensive While Its Toys Are Getting Cheap” I suddenly realized just why the pinch has seemed to be on our family with rising costs lately. The piece explored the rising costs of essential items while many discretionary item costs have fallen. The article poses the question, “Why does it seem like the least important things in life-TVs, toys, and DVD players-are getting cheap while the most important parts of the economy are getting more expensive?”
It notes that while prices for things like food, vehicles maintenance, and health and child care are rising, things like phones, cell phone service, toys, personal computers, and television prices are dropping…in some cases dramatically.
For all our family’s fiscal responsibility, inflation on essentials is hurting our overall ability to cut costs and keep expenses low.
Controlled discretionary spending
Ever since we graduated college, we’ve been great at controlling discretionary spending. We learned to do this best by asking ourselves certain questions. Do we need a particular item? Is it worth the cost? Do we have the spare money for such a purchase? Will we go into debt if we buy it? If we wait, will the price go down or will the item be on sale? Can we substitute a lesser or less costly item in its place? Are there coupons for such purchases? How long with the excitement of a discretionary purchase last? Can we wait and ask for the item as a birthday or holiday gift?
Such questions give us pause before we make a hasty purchase that we might regret later and keep our discretionary buys to a minimum.
The essentials are, well…essential
While we can cut costs on things like movies, dinners out, electronics, appliances, vacations/travel, and more, there is only so far we can reduce essential costs since essentials are well, essential. We need a place to live. We have to eat. We need clothing to wear. And having things like utilities, furnishings, and other accessories to support these items, while maybe not all essential, are certainly helpful in this day and age to our normal living environment. But once we cut these costs to a certain level by doing things like turning down the thermostat and unplugging appliances when not in use, shopping resale for clothing, and buying non-name brand products, it becomes harder to find ways to reduce these costs further.
So when it comes to keeping our essential costs down, minimize inflation in these areas, and look for further ways to cut, we must sometimes reprioritize just how we look at “essential” costs.
When it came to housing, we reprioritized our costs in this area by downsizing from a single-family home to a condominium. This not only reduced our housing costs by nearly 60 percent, but it took related costs – utilities, insurance, repairs and maintenance, and property taxes – down as well.
When it came to clothing, while name brands weren’t essential to us, we considered other options to cut this cost area even further. Accepting/trading hand-me-downs between family and friends for the kids and shopping resale was a great way to keep clothing costs down while still having nice things to wear. Meanwhile, rather than buying new once our aging vehicle hit ten years old, we put a little money into repairs and maintenance, which reduced the greater overall expense of buying new.
And in these ways, even though rising costs are still hurting our family’s budget, we were still able to combat these increases while maintaining our overall quality of life.
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The author is not a licensed financial professional. This article is for informational purposes only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in this article is solely at the reader’s discretion.