As you begin to think about your financial situation for 2013, consider the impact that higher and lower prices might have your budget. There are some things that are likely to increase in price during the coming year, and other things that could very well see a decline in price.
What You Will Pay More For in 2013
As you prepare your budget for 2013, here are some of the things that you can probably expect to pay more for:
- Food: The USDA expects that food prices inflation will be 3% to 4% in 2013. For the most part, it’s going to impact food items related to higher corn prices, thanks to a drought in the Midwest. Beef and dairy prices are expected to be especially hard-hit, and chicken and egg prices are expected to rise significantly as well.
- Health insurance premiums: This isn’t going to be much of a surprise to anyone. No matter what you think about the PPACA, the reality is that nothing is going to stop health insurance premiums from rising. Health insurance premiums are always going to rise because we have a for-profit system that focuses on returning value to shareholders. It doesn’t matter how healthy you are; your health care costs will always go up.
- Smart phones: One of the reasons that smart phones seem so cheap is that they are being partially subsidized by cell phone service providers. You agree to a two-year contract, and instead of paying $500 or more for a smart phone, you only pay $200 or so. Some cell phone providers are getting rid of this practice and will start charging full-price for smart phones — adding installment payments to your cell phone bill throughout the year.
- College education: This is another area that gets more expensive every year. College pricing rises regularly, from the cost of tuition and fees, to the cost of books. If you have a child getting ready to go to college, you can expect to pay more.
If these items are on your list for the coming year, now is a good time to adjust your budget accordingly. You should prepare for these higher prices — and the possibility that you will be bringing home less in pay for 2013.
Price Decreases for 2013
It’s not all inflation, though. Some things are likely to decrease in price. Marketwatch points out that there are four things likely to cost less during the coming year:
- Cars: One of the reasons I bought a new car in 2011 was that it cost less than a used car. However, used car prices are expected to start dropping again, so buying used could be a good deal again soon.
- Cable/Satellite TV: As more and more people discover the joy of streaming TV online with the help of cheap services like Hulu Plus and Netflix, there are expectations that cable and satellite TV companies will attempt to retain customers by offering better prices.
- Flat-screen TVs: With technology moving along, flat-screen TVs are falling in price, especially if you are looking for something fairly basic.
- Digital media: Marketwatch points out that digital media items are likely to see drops in prices. E-books should be falling, putting a bigger gap between the cost of hardcopy books and e-books. Other digital media items are also supposed to drop in price.
So, if you are looking to save a little money on certain planned purchases, 2013 might be a good time to buy.
Miranda is freelance journalist. She specializes in topics related to money, especially personal finance, small business, and investing. You can read more of my writing at Planting Money Seeds.