Across the planet, people are feeling the pinch as the cost of living continues to creep higher and higher. The cost of our groceries and the cost of fuel, electricity and gas are increasing across the board, as they always have, but most of our salaries and wages are not rising the reflect these hikes. Inflation is inevitable in society, but we’ll often see a rise in our income to counteract it.
While some people are getting pay rises to help ease the burden, the cost of energy and the rise in living costs far surpasses the percentage increase of most pay rises, meaning that people are still worse off than before. So why are these prices rising, and how are Americans coping with these costs?
How Much Are Food Prices Increasing?
Pretty much all food products have risen in price this year, and some of these are higher than they’ve ever been on average. It’s worth noting that many of the products that are at their highest ever figure are things that can be grown and harvested or include these items as ingredients. For example, cereal saw an increase of 16.8%, and fruits, vegetables, soups and baby food all saw large price rises.
Animal products also saw a huge rise, with eggs increasing in price by a stunning 38% in the US this year. These price hikes don’t appear to be slowing down anytime soon, however, and if these rises are combined with huge inflation, which, luckily, doesn’t seem to be a risk anytime soon for the US dollar, we could be in crisis mode.
Why Are Food Prices Rising?
It’s worth noting that, while these prices are increasing, so too are the profits of industry giants in the agricultural and livestock sectors. The main reasons for the rise in these prices are events that have caused instability in the world. The war in Ukraine, for example, increased the price of wheat as they were one of the globe’s largest producers. Coffee supplies also took a hit as climate change led to huge droughts across South America and Brazil in particular.
This drought destroyed a lot of the country’s coffee crops meaning that supply was reduced, and demand rose higher. This led to higher prices of coffee, as you’d expect. Unfortunately, the government cannot directly control the cost of food and doesn’t have food reserves as it does with commodities such as oil and gas, so it cannot distribute extra food to make up for disrupted supply lines.
Why Is The Cost Of Electricity Rising?
This increase in energy prices is largely down to the disruption in supply due to the war in Ukraine. Russia’s attempts to invade this eastern European sovereign nation have led to strict sanctions being placed on trade with Russia. However, Russia was one of the world’s biggest exporters of oil and gas used for electricity, which has understandably led to reduced supplies.
This reduction in supply has resulted in energy companies having to pay extortionate prices to oil barons who are exploiting this situation to make astronomical profits. Those energy companies are then essentially compelled to charge citizens higher prices for their energy; otherwise, these energy suppliers would face bankruptcy. Ultimately, these issues come down to the greed of the few who control the oil and gas supplies.
What Can We Do To Cope With This?
There is no definitive answer as to how everyone can handle these price rises leading to higher expenditure for all households. However, some steps can be taken to weather the storm and help people carry on as normally as possible. Reducing our overall spending is the first step to take. Many will look at creating and revising a budget to cut out unnecessary spending and redirect those funds to save for emergencies.
Emergency spending can be much more difficult to manage when costs rise across the board, as we end up being left with much less excess money to cover these unexpected costs. If your boiler breaks, for example, you’ll want money put aside so you can buy a new one.
There are also options for payday loans, where you could acquire a $500 loan to fix your car after it breaks down, for example. Just remember to use these wisely, as a payday loan will often have a high-interest rate and could get you into further financial trouble if you don’t pay it off quickly.
What Can People Do To Save More Money?
Our ability to save depends on two major factors: our income and our expenditure. Someone with the best will in the world will struggle to save money if their expenses are too close to their income. There are, however, a few other factors that influence our ability to save. Having a clear understanding of the different saving methods will naturally make it easier for you to put money away compared to someone unaware of the options available.
Doing your research on how to improve your savings should be your first step, as this will allow you to discover some methods that may have eluded you beforehand. Adjusting your budgets, looking into investment opportunities, and cutting your energy usage can all help you out financially in the long run.
Conclusion
Most people generally accept that something is going to have to give soon. The huge profits the few make at the expense of the many are unlikely to be tolerated for long and global situations like that in Europe and South America will eventually resolve. It’s more of a question as to when these problems will begin to get better rather than if they will.
In the meantime, it’s more important than ever to find ways to manage your money better and build up as much of your savings as possible to help you deal with these rising prices. There are also options available for those that are struggling to put food on the table, such as benefits from the government.
More spending is going into things like child food benefits, for example, to help reduce childhood hunger and fight against food inflation across the country, so it may be worth looking into things like this for families that need some assistance.
