Your budget won’t like this, but there are a number of goods and services you can expect to be more expensive in 2018. Giving you a heads up can make your planning a little easier and certainly keep you sharp when looking to buy. This list is meant to do just that. Here’s what you can expect in 2018.
14 Things Where You’ll See a Price Increase in 2018
1. New Phones
Smartphone prices have already started to rise. The latest iPhone model jumped to a whopping $999 and the Google Pixel 2 XL launched at $849. That means that some of us are now spending almost a solid grand on a phone (granted, they take some pretty amazing photos). It’s a trend that seems to run opposite from other tech products that usually get better and cheaper as they become more common. While there are always some good deals around, they are getting harder to find as phones are getting better but more expensive, and you can expect this trend to continue.
2. Vacation Travel
While airfare has been historically low over the past couple of years, the Global Business Travel Association (GBTA) expects that prices will rise by about 3.5% next year, so you might opt for a road trip instead. They expect hotel prices to rise by 3.7%, too. What’s the reason? A stronger global economy and rising oil costs are the culprits.
Because of that, jetsetters can expect to pay more for excursions in most of the world too according to the GBTA. Ground transportation such as trains, buses, and taxis are expected to increase slightly as well. Prices will vary depending on the destination, of course.
Even the National Park Service has already proposed more than doubling entrance fees to some parks. In fact, it’s already increased the senior pass price from $10 to $80.
3. Poultry, Beef, and Other Grocery Staples
While the prices of some grocery items, like dairy, beef, and eggs, have been falling towards the end of 2017, recently, the Consumer Price Index estimated that overall prices for groceries will increase by 1% to 2% next year. Prices for some items will be higher. For example, poultry prices are expected to go up due to supply issues. Even avocados, which were on the price hike list for 2016 and 2017, are still getting more expensive. The reason is clear: supply and demand and low crop yields due to weather.
We get over 80% of our avocados from Mexico and American consumption of the avocado has doubled over the last 10 years. The harvest is expected to be down over 40% in 2018. The worldwide love affair with the avocado and guacamole has even expanded into China so the demand is getting out of control.
4. Health Insurance
With the end of the insurance mandate in the ACA, health insurers are likely to begin charging much higher prices for the most popular plans. The price increase, thanks to market insecurity and the Trump administration’s elimination of federal payments to insurers, means that many customers who don’t get federal subsidies can expect so-called silver plans to jump by an average 34 percent, according to the consultant Avalere.
5. U.S. Mail and Package Delivery
The U.S. Post Office announced modest price increases across the board for letter delivery and priority mail flat rate delivery. Proposed new postage rates are to be implemented on Sunday, January 21, 2018, and were approved recently by the Postal Regulatory Commission (PRC).
Most stamps will see a one-cent increase, including the Forever stamp, which will go from 49 to 50 cents. Postcard stamps will go from 34 to 35 cents and the same for metered letters (46 to 47 cents).
UPS also announced price hikes for package, air freight, and freight delivery, with increases averaging 4.9% beginning on December 24. And effective January 1, FedEx already has increased rates for express, ground, freight, and FedEx One Rate pricing.
As we use more and more online shopping, you can bet that package delivery costs will continue to climb!
6. Going to the Movies (The Popular Ones, Anyway)
With their profits declining, theater chains such as Regal are considering instituting “dynamic pricing” which raises the price of the most popular movies at the most popular times. Theaters may, however, try to draw crowds by lowering the price of movies that flop so it’s hard to say exactly what the overall impact may be. A few years ago the same strategy was begun at major sports events like MLB where your home team began to charge more to see the more highly rated team ticket prices and less for the teams not in contention.
7. Oil and Gas Prices
As mentioned earlier as a cause of overall general price increases, the World Bank predicts that the price of all commodities will rise—but the one that carries more weight than the others of course is oil. Prices are expected to jump over 5% to $56 a barrel from $53 in 2017 this year, which of course relates directly to the cost of filling up at the gas station.
8. Natural Gas
Expect higher utility bills in homes using natural gas. Demand is expected to outpace supply as the nation moves toward a gradual transition to natural gas as the preferred fuel, meaning costs are likely to rise in most regions.
9. Sporting Events
Chances are good it’ll cost more to visit your local stadium for season ticket holders and occasional patrons alike, and for both college and pro sports. Teams such as the Boston Red Sox, Penn State University, and Miami Dolphins have all already announced the increased cost of tickets. Check with your local franchise to see if you’ll be asked to cough up even more in 2018.
10. Concerts and Festivals
One of the most iconic and popular arts festivals in the country and the world, South by Southwest in Austin, Texas just announced higher prices for this new year. Unfortunately, that’s not an exception but a real trend as “the experience” has become more and more the rage.
One big reason for increasing event prices is that artists are getting most of their income today from their concert appearances and less and less from other sources like record sales as in the past and you are going to be expected to keep feeding that monster in 2018.
Even if you don’t go to SXSW in Austin, you can expect music and arts festivals nationwide to follow their lead.
Some of the world’s most prolific wine-producing countries, such as France, Italy, and Spain, were hit hard in 2017 with extreme weather. Combine that with the wildfire damage done to California’s wine valleys and slow growing seasons in other places around the world, and so the grape harvests for 2018 are expected to be the worst in decades. For vino lovers around the world, it will mean prices have nowhere to go but up, according to experts. If you drink a lot, you may be able to forget the cost, at least for one night.
12. College Tuition
Wow, this is starting to sound like a broken record, but the cost of higher education will continue to rise in 2018. Increases will affect public two-year and four-year colleges, as well as private universities. With tuition already at all-time record high prices, projected increases will significantly outpace the 2% current rate of inflation, according to the College Board.
13. New Homes
Realtors expect 2018 to be a banner year for new home sales, with 1.3 million new houses likely to be built. That uptick is likely to drive an increase in selling prices, with costs expected to increase by 4.9% in the coming year. That may be compounded by increases in mortgage interest rates as well from the Fed’s recent interest rate increase and expected similar ones in 2018.
14. Cyber Protection
If the Equifax data breach taught us anything, it’s that we’re clearly in the age of increased cyber threats. That means our personal information is at risk like never before. Cyber protection spending, already at unprecedented levels, is expected to skyrocket to $96 billion in 2018 and it’s likely this spending will be passed on to, you guessed it, consumers.
The phenomenon of inflation reduces the buying power of a dollar over time. This affects the price of almost every product and service, and 2018 will not be immune to that.
It’s not all bad news for 2018. First, most of the working population will see some increase in their take home pay because of the tax law changes that have now gone into effect.
Job growth is predicted to increase and wages are projected to increase in 2018 overall, something that hasn’t happened in a meaningful way for a long time. With total inflation expected to rise similarly to that of 2017 by between 1.9% and 2.1% (according to analysts such as Kiplinger), you just might be able to withstand any unexpected price increases. If there is any good news here it this: historically speaking, about a 2% inflation rate is a fairly modest rate.
I can’t stress enough that we all need to do our homework in advance before we spend money on the things we buy all the time. If that means comparison shopping, checking out websites, using apps on your phone, seeking and using bonus and rewards to help pay for things, etc. you do it. Being lazy about that can only be excused (and reluctantly) if you are a wealthy son of a gun. But let me tell you this upfront, a certain trait of the wealthy isn’t laziness!
What are your thoughts on the projected inflation predictions for 2018? Are you in a good position financially right now to handle inflation and any unexpected affects it can have on you this year? Are you anticipating seeing a bigger paycheck and perhaps a pay increase in 2018 that will make inflation a non-issue for you?