Inflation’s impact on society has been widely discussed, with many voicing concerns about how it erodes the buying power of individuals, making life more expensive. This concern is reflected in actions by institutions like the Federal Reserve, which appears eager to trigger another recession to control inflation.
However, when I examine the historical price changes for essential consumer goods and services, I can’t help but think that the task of fighting inflation might be simpler than it appears.
Moreover, the general fear of inflation might be exaggerated for the average household. It’s common knowledge that prices for food, gas, and utilities are on the rise. But these increases are often offset by corresponding wage growth.
Apart from these three recurring expenses, inflation doesn’t seem to be a significant problem. Additionally, I doubt these items constitute a major part of the ordinary American’s spending. What may be most irksome is the constant reminder that these recurring expenses are becoming more costly.
Here’s an example: let’s analyze an inflation chart of various goods and services to better understand how prices have changed.
Now, let’s check the inflation of several consumer goods and services with this insightful inflation chart by Visual Capitalist.
According to data since 2000, the most significant price increases in consumer goods and services are in the following areas:
- Hospital Services
- College Tuition and Fees
- College Textbooks
- Medical Care Services
- Childcare
- Food and Beverage
- Housing
- New Cars
- Household Furnishings
Conversely, the prices for the following have declined the most since 2000:
- Televisions
- Toys
- Software
- Cellphone Services
- Clothing
Simplifying the Fight Against Inflation
It’s reasonable to expect these price change trends to persist in the foreseeable future. Consequently, some direct solutions to handle inflation include:
- Opting out of traditional college for community or state college
- Maintaining good physical and mental health to minimize medical needs
- Eating less or choosing more affordable foods
- Refraining from buying a new car, given the high average price
- Keeping your current car as long as possible
- Limiting family size or having no children
- Buying a home with a fixed-rate mortgage
- Investing in stocks, real estate, and other assets that outpace inflation
- Considering relocation to lower-cost regions or countries to save on healthcare and education
These solutions might seem obvious, but they can be effective.
Embracing Inflation as an Opportunity
If you follow these guidelines, the negative effects of inflation may not impact you significantly. You might even find inflation beneficial as your income inflates at a comparable or quicker rate.
Inflation often benefits real estate owners by pushing rents and property prices higher while keeping mortgage rates stable. It can also boost corporate profits as companies often raise prices faster than their expenses increase.
As long as you are engaged in a competitive industry and invest wisely in assets that historically outperform inflation, you could become wealthier with inflation’s assistance.
The Complexity of Counteracting Inflation
Naturally, not everyone will agree with all the proposed methods to combat inflation. Some may even object to suggestions like avoiding college, eating less, or not having children.
Each person’s circumstances and opinions are different, so it’s essential to carefully evaluate the trade-offs involved in these suggestions.
Alternatives to Traditional College Education
Paying full college tuition feels increasingly like a waste, especially when so much information is available online for free or at a minimal cost. With many students graduating without relevant job offers, the financial risk of pursuing a traditional degree is high.
Embracing online resources and specialized courses, such as coding boot camps or vocational training, might be a more cost-effective approach.
Educate Your Children Yourself
If we as parents take the time to teach our children what we know, we can equip them with essential life skills without the enormous expense of college education. Utilizing free online resources and teaching practical skills can be more valuable.
Health and Food Habits to Combat Inflation
Suggestions like eating less or staying in shape may be considered controversial, but they can have financial and health benefits. By reducing food waste and choosing affordable foods, households can offset the rising cost of food.
The Financial Benefits of Not Having Children
Although this option may not be feasible for those who desire children, not having them can lead to significant financial savings in areas such as tuition, childcare, housing, transportation, and healthcare.
Life Without Children May be More Affordable
Without the additional costs associated with raising children, families may find life more financially manageable. While the joys of parenthood often outweigh the financial burdens, the costs are undoubtedly significant.
Inflation Might Make Life Feel Cheaper Sometimes
During economic growth, when investments rise more than expenses, life can feel more affordable. Owning a home and other measures to fix significant costs can make inflation more manageable.
Regularly investing, controlling major expenditures, and living within means can turn inflation from an adversary into an ally. While battling inflation may seem simple, human nature makes it a complex challenge.
