5 examples of how rising food prices could affect your budget or financial plan
If you haven’t paid much attention to how much you are spending in the grocery store over the past year, you might not be aware that the cost of groceries has gone up a total of 5.4% in the past year. The prices of staples like meat, dairy, eggs, sugar and coffee have surged even faster. In just under a year, the average cost of a pound of bacon has gone up from $5.72 to $7.32, while a dozen eggs now cost, on average, $1.82, up from $1.41. That’s a 28% and 29% rise in price, respectively. The U.S. economy hasn’t seen rising food prices such as these in 31 years.
Since most of us buy groceries every week and sometimes every day, food tends to be the most visible indicator of inflation for most Americans. After all, the prices of luxury goods and many services can often be ignored, but everyone needs to buy food. These dramatically rising food prices have made it harder for the U.S. government to argue that inflation is “transitory,” especially when there are reports that meat processors are struggling to attract and retain workers, and there is stiff competition for workers and rising wages in the manufacturing sector overall. With food production workers receiving higher wages, we also can’t expect food prices to go back to where they were last year.
How will rising food prices affect my budget?
It’s still possible that labor and supply shortages will moderate, and supply chain problems will eventually be resolved. But for the time being, there are a few food-buying decisions that can help your family budget absorb the additional food costs.
- Cut additional spending — You may find that you need to cut back on other costs to compensate for the rising cost of groceries. Extra streaming services, restaurant meals and impulse purchases are all things that you should consider cutting back on.
- Buy in bulk — Shopping at warehouse stores or stocking up when there is a sale can help cut costs. It is almost always cheaper to buy pantry staples, meat and other items in larger packaging. Drying, freezing and canning are great ways to store bulk groceries.
- Cut back on meat — The costs of meat are rising higher than many other foods. Other protein sources such as beans and lentils are inexpensive and healthy.
- Choose generic brands — Store brands of packaged and processed foods are typically less expensive than name brands. As long as you check the ingredients list to make sure the food is free of filler ingredients or undesirable colors and flavors, generic brands are a great way to stretch your grocery budget.
- Seek help — According to the Department of Agriculture, visits to food banks and pantries have increased since 2020 for most households. Rising food prices can affect some people more than others, and it is better to look for help than to go hungry.
Talk to a ProVise CFP® professional about how rising food prices may affect your family’s financial future
At ProVise Management Group, our CERTIFIED FINANCIAL PLANNER™ professionals can get to know you and your current financial circumstances, goals, risk tolerance and personal values to help you develop a plan that works for you. We can also create a written plan for you at a fiduciary standard of care. All our written plans come with an unconditional money-back guarantee. If you are unhappy with your written plan, you can return it to us, and we will refund 100% of the fee paid.
Are you ready to talk to a professional about budgeting for your future? Contact ProVise today to schedule a complimentary consultation.