Will It Be a Happy New Year or Wallet War 2019?

If you are anything like me, you are probably wondering if you might be paying more for things in 2019. Experts predict that the answer is yes you will and one of the biggest reasons, although not the only one, is because increases in tariffs can cause it. With our recent trade controversies and disputes with foreign governments like China and Mexico, there has been a claim that price increases will go unnoticed, but that is starting to prove untrue as some economists and government officials had predicted. More and more now say they expect the impact on consumers to be pretty significant.

Will 2019 be a joyful new year, or will price increases cause a "wallet war" that may leave you broke? Here are 12 areas where price increases are likely.

“Things are going to become more expensive because of these added taxes,” best-selling author and personal finance expert Chris Hogan told CNBC. “This has the potential to impact a lot of areas that people need day to day to survive or to run their business.”

Everything from TVs, washing machines, solar panels, cosmetics, and even beer cans are being affected right now and the prospects for 2019 are staring us all right in our faces! Even with a temporary “truce” on the current trade war with China announced just this past week, the dangers of inflation are right here. Here’s what is on your horizon for 2019 and the “wallet war” that I see.

Expected Price Increases for 2019

1. Interest Rates

If you’re searching for a home and have been shopping mortgage rates, you might have noticed that interest rates are on the rise. That’s because the Fed raised rates more than once as the economy improved in 2018. In 2019, the Fed is expected to raise rates not once, but two more times, which means borrowing money is about to get a lot more expensive even if a new CD is earning a few points more.

2. Houses

Speaking of home buying, the recent trend in soaring home prices will continue in most American cities in 2019. While there are a few markets that will favor buyers thanks to an increase in new home construction, the bulk of the country will remain firmly in the grip of the sellers because most markets suffer from very low inventory.

3. Cable TV

Cable TV giants like Spectrum are set to raise their rates for TV service yet again in 2019 with some premium packages now slated to come in at more than $250 a month. The disappointing rising price structure is in fact due to increasing fleeing of subscribers every day as more and more join the cord-cutting movement and find the alternatives more cost friendly and suitable to their specific viewing needs. Even if you don’t cut the cord, there are still ways to cut your bill.

4. U.S. Mail and Packages

It’s starting to sound like a broken record but our postal system is a total mess. The United States Post Office has already announced another modest price increase for both letter delivery and priority mail flat rate delivery. Mail itself is becoming obsolete in the 21st century. Also in 2019, FedEx will be increasing its shipping rates, and UPS is also expected to announce a price increase soon too.

5. Prescription Drugs

Despite all the rhetoric about doing something about the cost of prescription drugs, their pricetag is expected to grow by another 5% in 2019, according to the American Pharmacists Association. This comes on the heels of a 2018 jump where prices have risen more than 7.5% over 2017. It’s one of the many reasons to take care of your health before it’s too late. But if you are taking prescriptions, there are ways to save on your costs, including splitting pills in some cases.

6. Medicare

Even with the good news of a decent COLA increase for Social Security recipients, some of it goes bye-bye with premiums paid for the Medicare Part A and Part B programs which will both rise in 2019. While the $1.50 increase might not be much on its own, it’s important to note that seniors will feel the tug from both ends. Deductibles for both programs are also set to rise.

7. Employer Health Insurance

If you feel like the cost of your employer-based health insurance is high and getting higher, you are 100% correct. Americans just experienced the 9th straight year of premium increases in 2018. In fact, premiums have climbed by more than 60% over the past 10 years and that is more than double the rate of wage increases and triple the rate of inflation during that same period. Here’s the bad news for 2019. You can expect average premiums to jump by another 5% and your deductibles will get even bigger, too.

8. Goodies and Snacks

According to Bloomberg News, brands like Hostess are quietly devising a plan to increase profits without scaring away sweet-toothed customers. Most of that strategy involves higher prices in the grocery store snack aisle for 2019. Ding Dongs and Twinkies, however, aren’t the only snacks that will come with higher price tags—the entire industry is predicted to follow Hostess’ lead.

9. Retail Food Prices

Yes food, you can’t really avoid this subject and the United States Department of Agriculture predicts that the price of retail food will jump between 1% and 2% again in the coming new year, with fresh vegetables and dairy likely to climb the most. Consumers will be once again challenged with trying to save and find the real bargains. I will continue to write about that in Super Saving Tips and you will still find it to be required reading in 2019 (at least I hope so!).

10. Cars and Trucks

Thinking of picking up a new set of wheels in 2019? Maybe you should speed up your timetable, or consider buying used. According to Consumer Reports, cars and trucks are poised to get noticeably more expensive. When you see the sticker prices in 2019, you can lay the blame on the new tariffs and climbing interest rates—and you do know who started this insanity, don’t you?

11. Travel

If you are one who enjoys exploring the world, or even just like to jet away to Florida or some other warmer climate, you can expect to pay more for your excursions in most of the world. Airfares are predicted to increase by more than 2.5%. Oh and the cost of staying in a hotel too, which is projected to go up by almost 4%.

12. Wait for It…Everything (Thanks to Inflation and Tariffs)

The phenomenon of inflation gradually reduces the buying power of a dollar over time. This impacts the price of almost every product and service—and 2019 will not be immune. Through punitive tariffs, total inflation is expected to rise by between 2.5% and 3% or even more. It seems to be a negative trending pattern we are heading right into.

Final Thoughts

Even with the new tax cuts and some growth in take-home pay because of the new tax laws, things like a trade wars and tariffs can and will have a negative effect on your buying power. Even such things like climate problems will cause issues when it comes to food and energy.

With total inflation expected to rise in its projected bracket, you may be able to withstand any other unexpected price increases. But, do you know for sure? 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 bonuses 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 2019? Are you in a good position financially right now to handle inflation and any of its effects it can have on you this year? Are you anticipating a new job or a pay increase in 2019 that will make inflation a non-issue for you?

About Gary Weiner @ Super Saving Tips

Over the last 45 years I've worked in retail (department stores and supermarkets) and financial planning. In addition, I am a shopper, born and bred, who enjoys the challenges of finding the best items for the best prices. When I'm not busy saving money or writing here at Super Saving Tips, I enjoy baseball, music, and classic movies. I am retired and live in New Jersey with my wife.
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