Putting Off Spending Due to Inflation is False Economy
Published / Last Updated on 06/12/2022
Many of us are cutting back on our spending due to increased costs of living, energy, and utilities costs as well as increasing mortgage or rental costs.
Essential Items
We all need food, heat, light, water, and a roof over our heads, so whilst we may be more careful and make cutbacks, we will still spend on essential subsistence living expenses.
Tips for Essentials:
- Buy essentials in bulk. If you afford to buy a year’s supply of soup, toilet roll, toothpaste etc., then do so.
- If you can buy up those special offers in bulk from supermarkets, then do so.
- Make a point of trying to buy at least one or two ‘bulk buy’ items each time you shop.
- Collect money off vouchers and use them.
- Wholesale purchases are ideal if you have access to a wholesaler card such as Bookers or Costco. Buying in bulk early, can save you money before prices rise. You just need to have some storage, even your loft.
Non-Essentials and Big-Ticket Items
Many of us will cut out completely, cut back or postpone big ticket items for the time being. This may be a false economy.
Inflation is running at around 10% pa. This means that goods and services cost an average 10% more than they did last year. Some goods and services have increase in price by much more than this. Many of us will be put off spending in this area. Do not forget though, prices for most items are unlikely to fall.
With inflation falling back to say 6-7% pa next year, these are not prices falling, this just means prices were 10% up this year and could be 7% up next year meaning prices will have risen 17.7% in two years. You are unlikely to get 20% in pay rises over this year and next, so any higher ticket items are fast becoming out of your reach.
Tips Non-Essentials and Big-Ticket
- If you have urgent roof repairs or need to buy a new washing machine or gadget or even book a holiday, it will be cheaper in the long run if you buy it now.
- Some big-ticket items may fall to zero demand in which sellers may be forced to cut prices, but we do not think many will, but some may.
- Watch out for seasonal sales as retailers offload old lines ready for the new e.g., Black Friday, Boxing Day, January, Spring, Summer, and Autumn Sales. Buy a winter coat in summer, buy your bikinis in winter, don’t buy a lawnmower or garden furniture in Spring/Summer, buy them in winter.
- Watch out for time sensitive issues e.g., Japanese company year ends are usually in March, they may wish to offload cheaper TVs and games consuls, car number plates change in March and September, are there any bargains in February and August?
- Register of discount code and voucher websites, those items that you seek may just drop into your mailbox.
We know all of the above may seem obvious to the ‘savvy’ shopper, but you would be surprised how many of us do not put these simple principles into practice.
