This new year brings with it some bad news for consumers. The following are a few things that will be costing you more - and what you can do to help offset the added costs.
FOOD: The USDA forecasts a 2% to 3% hike in the cost of all foods in 2011. Higher corn and soybean prices are the main culprit. And lest you forget, higher corn prices, thanks to ethanol, means the feed for farm animals goes up, so you pay more for meat. Pork is forecast to rise between 3% and 4%. And almost all other foods rely on corn and/or soy to some degree. A fuel prices means it costs more to grow and transport food, increasing the cost to you.
SOLUTION: Use grocery coupons, including those found online. Shop the weekly sales and specials. Don't buy anything on impulse - stick to your list. Check to see if your community has a grocery co-op you can join. And even if you only have a postage stamp property, consider planting a vegetable garden, even if you have to join in with neighbors.
FUEL: A former Shell Oil President says gas will be $5 a gallon this year. That's about $2 more per gallon than the current average price of $3.05, says the Department of Energy. Blame it on the weather. In spite of the hype surrounding global warming, once again unexpectedly harsh winters here and in Europe have created a higher-than-usual demand for heating fuels.
SOLUTION: Use less. Carpool, combine errands, ride a bike, walk. At home, wear a sweater and keep your thermostat set low. Consider alternative fuels for at least part of your heat, such as solar panels or wood heat. Seal any cracks or leaks around your windows and insulate your water heater.
HEALTH INSURANCE/MEDICAL: Blue Cross said it was going to raise premiums by almost 60%. Other insurers have similar price hikes planned. Don't look for much help from the government here - it is the government that is responsible, by making higher and costlier demands on insurers with their "Affordable Health Care Act" (what a joke). Although the Obama administration wants individual and small-group insurers to justify when they raise rates by 10% or more, the Department of Health and Human Services wasn't given enforcement authority to do anything about it even if the hikes are deemed unreasonable.
SOLUTION: Insure only for the things you cannot afford yourself, like catastrophic (major medical) or use a high-deductible health plan. You might be able to handle $10,000 in medical bills, but not $100,000 -- hence a catastrophic plan could save you a lot in premiums. If you have dental insurance think about ditching it in favot of the Costco dental plan at $87-a-year.
CLOTHING: Cotton is now 80% more expensive than it was at the start of 2010. That means higher prices for clothing.
SOLUTION: Avoid buying new. GoodWill and other thrift stores often carry very good clothing, some new, or nearly new. Organize a kids' clothing swap at your school or a clothing swap party among your friends. Of course, if you are handing with the sewing machine, consider making some of your own clothing.
SECONDARY EDUCATION: Overall, college tuitions are up by almost 8% at public, four-year colleges and 4.5% at private colleges. Reductions in alumni giving and state funding will cause costs to keep increasing.
SOLUTION: Consider enrolling in a community college for the first two years, to get the basic courses under your belt, or at least taking some of your courses there over the summer or in evening classes. Community colleges are cheaper. Also, look into CLEP - getting credits for what you already know.
CHILDREN: Kids often require babysitters, tutors and summer camp, among other costly things. Babysitters charge as much as $12 to $15 an hour these days - twice what flipping burgers pays.
SOLUTION: Swap parenting services with other parents - you help my kid learn math, and I'll help yours with history. I'll take yours to soccer with mine, if you take mine to baseball practice with yours. Organize homework clubs instead of hiring tutors and babysitting co-ops instead of hiring a sitters.
BANK FEES: You can thank Congress and the administration for the extreme hike in banking fees. But forcing banks to stop certain practices that cost customers money, banks have chosen to add or increase other fees, so now instead of the deadbeats paying for overdrawing, everybody pays. Checking fees, ATM fees, safety deposit box fees - even fees for talking to a teller!. New banking laws have meant new banking fees - as I have blogged before, every new regulation is money out of YOUR pocket.
SOLUTION: Shop around and find out exactly what fees a bank charges. Some banks are better than others; credit unions are usually better than banks. Avoid using ATM's altogether except in emergencies, and whe you do use one, choose one that allows you to withdraw the maximum amount and do just that. A $5.00 ATM fee on $300 is just 1.7%. But that same $5.00 fee on $60 comes to a whopping 8.3%.
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