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Recent articles by Liz Pulliam Weston: • Take your retirement on the road, 5/29/2004 • Is the new wave in health insurance for you?, 5/23/2004 • Retire like royalty in a low-cost paradise, 5/14/2004 More... |
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| 25 items -- butter to bikes -- soaring in cost | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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$2 gas may have blinded you to $4 milk, or that your car tag is up by a third. Here's where the real inflation is, plus 25 goods and services whose prices are actually falling. By Liz Pulliam Weston Its hard to miss soaring gas prices, especially if youre filling up an SUV. But have you noticed that butter is setting you back a pretty penny these days or that you got a break this spring on womens bras? The overall inflation rate, measured by the Consumer Price Index, is churning ahead at more than a 4% annual clip, but contained in that basket of prices are hundreds of items whose fluctuations dont garner headlines, even though they may greatly affect your pocketbook. At MSN Moneys request, the Bureau of Labor Statistics, which tracks this stuff, checked its list of consumer products and services to see which items had changed the most in price between December 2003 and April 2004, the latest data available. (The price changes are annualized, which means they reflect how much more or less the item would cost in a year if prices continued their four-month pace. The actual price change is a bit less than one-third of the listed figure.) Heres what we found and what you can do about it:
Inflation experts say that some items, such as apparel and accessories, can swing widely in price based on seasonal sales and retailers whims. Thats among the reasons womens suits and separates show up in the biggest-gainers list, while womens dresses and underwear appear among the biggest decliners. (See the full list below.) But the numbers do illustrate several larger trends: The big shadow cast by oil prices. Higher oil prices have pushed gasoline over $2 a gallon, but they are also helping to inflate a range of other costs, from home heating fuel to delivery services to air fares. The trend hasnt depressed travel, however, which is rebounding nicely and helping support higher lodging costs.
When faced with rising prices, consumers who want to save money have two basic choices: conserve or substitute. Some ideas:
Related news and commentary on MSN Money Milk and cheese are great nutrition and probably not something youll want to cut out of your diet completely, but that doesnt mean you have to let your family have unlimited amounts. Many thrifty shoppers limit kids to one glass of milk at meals, for example, followed by water. Save money and calories by adding butter to vegetables and bread in the kitchen, rather than leaving it on the table, or forgo the fat entirely. You also can freeze milk, cheese and butter with little loss of quality (although some hard cheese can get a little crumbly). So when you find a good price or visit a bulk grocery store, stock up. Troubles on the farm mean cheaper steaks, pricier eggs. The low-carb craze depressed the price of Krispy Kreme stock, but it wasnt enough to assuage consumer concerns about mad-cow disease. Thats helped send the price of uncooked beef tumbling. High-protein diets were, however, enough to help egg prices rise when combined with the avian flu that decimated poultry stocks in Asia and Canada. Meanwhile, unseasonably warm weather helped mature lettuce and tomato stocks early, leading to an abundant supply with lower prices that have depressed farmers but delighted shoppers. Eggs are still a pretty cheap source of protein compared with beef or ham. But if the price bothers you, there are plenty of other choices for Sunday brunch. Cash-strapped states. Lawmakers looking for new revenues helped push through big increases in motor vehicle fees and state college tuition, among other costs paid by consumers. Of course, college tuitions have increased at more than twice the rate of inflation for two decades, but the latest budget crises caused states to jack up public tuition at an even faster clip. You can let your lawmakers know how you feel about these increases, of course, but, in the meantime, you might consider selling or storing any excess vehicles. Putting off a new car purchase for a year or two can also save you money, since state fees are usually based on the vehicles value. Anyone concerned about rising tuition has a number of alternatives, from looking for a cheaper school to taking a semester off to work. Advancing technology. Consumers have grown so used to falling computer prices they take it for granted that the machine they buy today will be replaced by a faster, more powerful version for less money tomorrow. But prices have dropped on a wide variety of other technology, including telephones, audio and video equipment, Internet services and photographic equipment and supplies. That doesnt mean you need to rush right out to buy the latest and greatest. But sometimes new technology does save you money, make you more productive or both. Many a digital camera buyer, for example, discovers decent savings when shes no longer paying for film or development.
Liz Pulliam Weston's column appears every Monday and Thursday, exclusively on MSN Money. She also answers reader questions in the Your Money message board. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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MSN Money's editorial goal is to provide a forum for personal finance and investment ideas. Our articles, columns, message board posts and other features should not be construed as investment advice, nor does their appearance imply an endorsement by Microsoft of any specific security or trading strategy. An investor's best course of action must be based on individual circumstances.