Get ready to stretch your wallet. We're already seeing the signs of prices creeping up in just the infancy days of 2011. So be prepared to open wide for:
1. A Trip to the Grocery Store
The USDA forecasts a 2% to 3% hike in the cost of all foods in 2011. Higher corn and soybean prices are the main force behind the increase. Remember, farm animals have to be fed and when those costs go up, so does what you pay. Expect a big spike in the dairy case and meat counter, where pork alone is forecast to rise between 3% and 4%.
If it's any comfort, in 2008 food costs overall rose more than 5.5%. And you still didn't lose weight.
Solution: Sign up for sites that offer grocery coupons. Shop the weekly sales and the manager's specials. Plan your meals for the week and make a list of what you need before you go to the market. Don't buy impulse items, even if they're on sale. Consider a grocery co-op if your neighborhood has one. Don't be afraid to try planting a vegetable garden, at least for your fresh herbs.
2. The Cost of Gas and Heating Fuel
If you are hanging on to that Hummer, now might be the time to unload it. Some fast-and-loose talk by former Shell Oil President John Hofmeister says gas will be back to $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. Unexpectedly harsh winters here and in Europe have created a higher-than-usual demand for heating fuels. Add to that the increased demand for fossil fuels in places like China and India and the depreciation of the U.S. dollar -- and dare we mention the overall greed of the oil industry? -- and there you have it.
Solution: Demand dictates price, so use less. Carpool, car share, combine your errands, ride a bike, walk. At home, wear a sweater and keep your thermostat set low. Consider solar panels and absolutely seal any cracks or leaks around your windows.
For those with too much time on their hands, the price-tracking Gas Predictor can tell you whether you should fill up the car today or tomorrow.
3. Health Insurance and Medical Costs
Blue Shield in California said it was going to raise premiums by almost 60% and you can bet that your insurer has something similar planned.
Don't look for much help from the government here. The Obama administration wants individual and small-group insurers to justify when they raise rates by 10% or more. But it's a toothless gesture. 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: Consider a catastrophic or high-deductible health plan, something that will kick in only for big-ticket medical bills. Experts recommend carrying insurance for the things you can't handle yourself. 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. Also consider dropping dental insurance. Costco has a $87-a-year plan that just might get you what you need, assuming you don't need to see your own particular dentist.
4. The Cost of Clothing
Cotton prices are on the upswing and you're going to feel it in the stitched pocket. Cotton is now 80% more expensive than it was at the start of 2010 and many manufacturers believe they have no choice but to pass it on to you.
Solution: Fortunately, you do have a choice. Don't buy it. Thrift store shopping has enjoyed a renaissance this recession. Organize a kids' clothing swap at your school or a clothing swap party among your friends. Dare we suggest you even drag the old sewing machine down from the attic?
Read more:
http://www.walletpop.com/2011/01/07/seven-things-that-will-cost-more-in-2011-and-what-you-can-do-abo/?icid=maing|main5|dl3|sec1_lnk5|36333
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