Now that we’re halfway through 2022, many people want to reflect on their financial and personal goals for the year. We might want to cut back on unnecessary spending or start to save for a house.
2021 was a strange year with inflation reaching as highest amount since 1982 – a full 6.8%. This meant a large increase in the cost of living. It’s always a good idea to look at your monthly expenditure and see where you might be able to cut back. Price increases are everywhere – let’s look at some of the most common ones.
Food Prices Continue To Increase
2021 saw our dollars not stretching as far when it came to our groceries. 2022 has been the same. We also see very limited evidence of this changing in the second half of the year and high food prices are here to stay for a while.
There are a couple of reasons for this. The pandemic was a big one. It put a big strain on many businesses and they were required to make workers work longer hours and businesses have found the cost of raw materials increased. This has decreased supply and increased prices.
This has been compounded by people working from home throughout the pandemic. Cooking was taken up by many people as a great way to socialize with the household, increasing the demand for cook-at-home food.
This has been compounded by terrible weather across the crop-growing regions. Wheat and soybeans have been hit hardest. This has also been impacted by the war in Ukraine which further decreased imports.
The Rise In Housing Prices
In 2021 there is a huge increase in property prices- with a 19% increase across the board between September 2020 and the same month in 2021. 2022 has been a similar story with an increase of around 11% then where we were in 2021. This is lower than last year’s increase but is still tough.
Given the other issues that are facing the economy, it is unclear whether this will continue throughout 2022. Zillow predicted an 11% increase whereas realtor.com has only predicted a low 2.5% increase. You also see some predictions of a contraction of house prices in the US with the mortgage bankers association predicting a decrease of 2.5%. It’s difficult to predict exactly where the market will go, but we know it will be turbulent.
Medical Care Continues To Be Expensive
Medical care is ridiculously expensive in the US anyways and it will continue to stay like that. Currently, health costs have increased more than 10% since 2020. Because healthcare costs are already expensive and the other 10% on top can be devastating. In 2021 the cost of an ambulance was around $400 and you could be paying anywhere from 100 to $500 for other medicine and tests. Bills much higher than this are likely.
Even though the cost of going to a doctor remains high, neglecting your health could be a higher cost to you in the future. Try to get to the doctor if you can when you’re feeling ill so as to catch any long-term issues that might impact you.
Gas Prices Reach a Boiling Point
We thought 2021 was bad for gas prices- 2022 has exceeded all expectations of this. It soared by an incredible 58.1% and this is a difficult number to swallow and might be something you’re avoiding looking at. Michigan and Illinois are expected to see even higher prices, but across the US gas prices remain high.
To combat some of these prices, you could look to switch to public transport, take a bike, or even walk. Electric cars remain expensive but with the increase in solar panels and renewable energy, they’re good for the environment. Think of the different ways you can get around instead of jumping in the car for every journey.