As the new year begins, we tend to set ourselves new goals, many of which may bear testament to our frivolous spending the previous calendar year.
With inflation in 2021 reaching its highest since 1982, at 6.8%, the cost of living has sharply risen. The new year therefore presents the perfect opportunity to familiarize ourselves with where our costs may be surging most.
Price Hikes 2022: What to Expect
Food Prices Expected To Continue Rising
2021 saw the price of what was on our plates jump, and 2022 doesn’t look like it’s about to reverse that. There are a few reasons for that. Firstly, with the pandemic having put financial strain on business owners, they were forced to make workers redundant, creating a fall in supply, and a paralleled rise in prices.
Additionally, demand has been amplified by US citizens being at home more throughout the pandemic. Cooking was a common hobby taken up by those searching for new pastimes. As such, a rise in demand, coupled with a fall in supply, has seen prices soar.
On top of this, troublesome weather in crop-growing regions triggered a fall in supply of raw crops such as wheat and soybeans. Once again, supply and demand react to these changes, and create a ripple effect, resulting in higher retail prices.
Housing Prices Being Built Up
In 2022, it is expected that property prices could surge to around 11% higher than they were in 2021. This would actually mark an improvement from 2021’s price change, which saw a 19.5% increase between September 2020 and the same month in 2021.
However, given the turbulent state of the economy, there are mixed opinions as to if and how much house prices will truly be jumping so dramatically. For instance, while this 11% prediction is held by Zillow, Realtor.com have predicted a comparatively meek 2.5% rise. Meanwhile, the Mortgage Bankers Association goes so far as to suggest that there will be a 2.5% decline in the price of existing homes. As such, it’s difficult to be on the money ahead of time, but it is sensible to keep up to date regarding home prices, especially if you’re considering buying or selling.
Cost Of Medical Care Hurting The Wallet Even More
Already notoriously high in the United States, the cost of medical care in 2022 shows no signs of slowing down. At present, health costs have risen almost 10% since 2020, according to Milliman. As healthcare prices are steep to begin with, these increases are significant. The cost of an ambulance in 2021 sat at around $400. Additional tests could cost $100-$500, with higher bills not being atypical. An overnight stay could run your bill up by thousands of dollars, while a regular visit to a family doctor will set you back by about $100-$200.
While it may seem counterintuitive, if you’re feeling unwell, go to the doctor! While this represents a cost, this cost could become even more damaging if your condition worsens, not to mention the fact that you should never neglect your health.
Gas Prices Bubbling Over
2021 was a bad year for gas prices, with them soaring by an astounding 58.1% While it may be difficult to fathom your receipts staring back at you with even higher figures than they already are, states such as Michigan and Illinois are expected to see even higher prices.
To avoid being hit by these high prices, you could consider switching to an electric car or a bike when it comes to travel, or better yet, you could become a frequent user of public transport. Although this is expensive, if you aren’t able to walk around the city, it represents a more economical and sustainable form of moving around the city.