You can expect to get a raise in the coming year. It is expected that employers will give out a 3% in 2014. If you think that’s small then wait till you hear some other bad news. That 3% increase is only expected to offset the effect of inflation which is expected to be at 3% as well. In effect, you are not going to benefit from the pay increase at all .
Inflation plays a big part in our lives, although few people think about it. Inflation would eventually dictate the prices of the products and services that we want to get. Fortunately for us, inflation has been almost stagnant for a long period. In the first ten months of 2013, the consumer price index rose only by 1%, which is significantly low.
Inflation would have the biggest impact on the poor people who have lesser means of coping with rising prices. Their incomes also declined or remained stagnant after the recession that the country went through. It is also significant to note that the gap between the lowest and the highest earners has widened in the past two decades. In that period that gap has increased by 21%.
Not only is the increase in prices bad for ordinary consumers, but it will be also bad for the economy as a whole. Consumer spending accounts for almost two thirds of the whole US economy. Just imagine the impact on the economy if people started buying a lot less because of the rising prices. That would wreak havoc on the economy.
What Will Become More Expensive
To help you become prepared, here are the things that you can expect to cost more this 2014.
The Cost of Loans
You can bet that getting a loan will become more expensive by 2014. The Federal government is bound to cut down on its bond purchasing program because the economy is starting to get better. That would have a direct impact on the interest rates which are sure to go up. Higher interest rates would be good news for a lot of savers but that’s not good news for those who are out to get loans. Experts are predicting that the interest mortgage would go up from 4% to 4.9% within the 30 years‘ period. That means a great deal of money for the borrowers over the long term.
The Cost of Housing
The price of housing has been rising steadily in the past few years. In fact the increase has reached a double digit growth which many see as unsustainable. Despite the view that such an increase in prices cannot be sustained in the long term, experts also believe that the cost of housing would continue to go up in 2014. The National Association of Realtors believe that the price of new houses are going to go up by 5.1%, of existing homes by 5.3% by 2014. They also believe that rent is going to increase by 2.2%.
The Cost of Education
Going to college is already an expensive thing to do and it is bound to become even more expensive in 2014. It is predicted that the fees and the tuition for public colleges will go up by 2.9%. Private schools will have an even bigger price increase. Their cost would go up by 3.9%. To be fair, that increase is actually lower than in previous years, but the bad news is that experts predict that the price increase will not stop for this year but will continue. Another daunting fact is that the price that would be borne by students is going up as financial aids, are starting to decline.
The Cost of Stamps
Snail mail might become more obsolete with each passing year but some people still use it. For those who rely on it, there is some bad news waiting for them. The overall cost of posting a letter will go up by 6.5%. The cost of sending packages and postcards will go up as well. It is worth noting that this price increase is really needed because the U.S. postal service lost $16 billion last year.
The Cost of Food
Food is going to cost you more in 2014 and it doesn’t matter whether you get it at the grocery or you eat out at the restaurant. The Department of Agriculture expects food prices to go up by 3% for this year. On the top of the actual costs of food, eating out can become more expensive because of some policy changes that affect the restaurant industry including the minimum wage laws.
The Cost of Air Travel
If you think that air travel is expensive then you’re surely wrong. It’s bound to become even more expensive in 2014. The merger of U.S. Airways and American Airlines will actually cause the cost of air travel to go up instead the other way around. This will come from the fact that competition will go down and there will be less reason for airlines to offer more competitive prices. There are other factors as well that will cause the cost of air travel to take off, but the sure thing is that it will affect the passengers the most.
The Cost of Company Health Care
It’s still not clear if people getting health care through Obamacare will pay more in 2014, but it’s clear already that those who go for company health care will pay more. It’s easy to figure out why this is happening. Companies are looking for ways that they can cut down on their costs. One of the best ways that they can do, is by shifting more of the costs to the workers themselves.
These are just some of the things that will cost a lot more in 2014.
What Will Become Cheaper
We’re through with the things that are bound to become more expensive in 2014 and it’s time to look at what would probably become cheaper.
If you are thinking of buying a car next year, then you should give some thought to getting a used car instead. The prices of used cars have fallen and experts believe that trend would continue in 2014. The falling price of the used cars is one more argument in favour of buying them instead of new vehicles.
There is an oil boom going on in the United States right now. This, combined with the fact that the demand for oil is going down because of increased fuel efficiency of new vehicles, is driving the price of oil down.
There is a lot of interest concerning 3D printers. The problem is that the cost of the machine prevents a lot of people from using it. But in 2014, many of the patents that allow the 3D printer to work will expire. It is expected that the cost of 3D printers would go down significantly after that. It is expected that the latest 3D printers would only cost a couple of hundred dollars by then . That can be pretty exciting for many consumers.
These are the things that will become cheaper in 2014.