Looking for good deals in the new year? You’re not alone if you’ve been struggling to find affordable options. The cost of living keeps going up. Necessities have become more expensive due to inflation, with prices across major categories rising by 3.7% in just one year, according to Consumer Price Index (CPI) data from September 2023. The illusion of stable prices was attributed to a phenomenon called ‘shrinkflation.’
Hello to a better cost of living! Here’s what you can expect:
Despite people adopting budgeting tricks and creative ways to save money in 2023, many still felt the financial pinch. As we look ahead to 2024, there’s uncertainty about the economy. Adem Selita, CEO of The Debt Relief Company, anticipates that consumer goods prices will continue to rise but may reach a high-water mark, providing some relief to consumers. Fortunately, not all consumer goods prices will increase. Financial experts suggest that certain items will become more affordable in 2024.
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Eggs – one that saw us panicking about the cost of living
Following a bird flu outbreak that affected egg supplies and raised prices, the egg supply has increased. Prices were down 18.2% compared to a year ago, and further declines are expected in the new year.
Appliances
After facing supply chain disruptions during the pandemic, appliances’ prices are now falling every month and are expected to continue decreasing in 2024. This presents an excellent opportunity to buy household appliances.
Natural Gas
Natural gas prices are down 11% from a year ago and are expected to continue falling throughout the next year, providing potential savings for those relying on it for heating during the colder months.
Used Cars
Used car prices, which skyrocketed during the pandemic due to supply chain issues, are already down 8% from a year ago. With new car and truck production stabilizing, experts predict further price drops in the coming year.
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Travel
With a decrease in consumer demand for travel, hotel accommodations are expected to see price decreases in 2024. Lower business travel and overall reduced demand due to the pandemic contribute to this trend. Travel credit cards can also help you save more on your vacation.
Electric Cars
Thanks to cheaper battery production, expect a decrease in electric vehicle (EV) prices in 2024. Recent discoveries of lithium deposits in the U.S. and proposed tax credits for new EVs are contributing factors.
Televisions
Prices for TVs have remained low, and experts anticipate that the trend will continue in 2024. Supply chain bottlenecks clearing up, excess inventory, consumer spending tightening, and the release of newer models contribute to this ongoing trend.
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Furniture
Furniture prices, boosted by pandemic spending and supply chain issues, have started to trend down. With spending subsiding and available inventory increasing, furniture prices are expected to continue falling in 2024.
While not all list prices may drastically decrease, being savvy and taking advantage of these trends can help you save money and keep more cash in your wallet. There is, however, some bad news.
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There are a few things that are projected to do just the opposite
As we enter the new year, it’s crucial to maintain realistic expectations about economic trends and the cost of living. Generally, prices are anticipated to grow slower than in recent times, marking a shift economists call disinflation. It’s important to note that this differs significantly from deflation, where prices decrease, and consumer goods become noticeably cheaper. While overall prices are expected to moderate and become less burdensome on people’s budgets in 2024, not every expense will follow this trend. Experts predict that certain goods and services will actually increase costs next year despite the calming effect on inflation. Let’s take a closer look at what is likely to become more expensive in the coming year.
Auto Insurance
As per Labor Department data, car insurance costs have been surging, outpacing overall inflation with a year-over-year increase of over 19% in November. Experts predict this trend will persist into the new year due to sustained high expenses for car insurance companies. According to the nonprofit Insurance Information Institute, factors such as severe weather leading to increased accidents, higher labor costs, and pricier repairs contribute significantly to the elevated policy prices.
Some Electric Vehicles
Recent weeks have seen a prime opportunity to buy electric vehicles (EVs) with an oversupply on dealer lots and a tax credit of up to $7,500. However, starting January 1, 2024, stricter rules on where EV batteries are produced will emerge. Several popular EV models, including the Tesla Model 3, Cadillac Lyriq, Chevy Blazer, Mustang Mach-E, and Lincoln Aviator Grand Touring, may lose eligibility for the tax credit. While sticker prices may remain unchanged, buyers not qualifying for the tax credit will face higher out-of-pocket costs. A positive note is that, from 2024, the tax credit can be applied as a discount at the time of purchase.
Health Insurance – not one we’re happy about with the cost of living being so high as it is
Health insurance, thus far relatively unaffected by inflation, is expected to experience an impact in 2024. Hospitals and healthcare providers facing increased costs for supplies and labor have yet to fully reflect these expenses in insurance prices. Predictions from firms Mercer and Willis Towers Watson suggest health insurance plans through the workplace could see a 6% increase in price. This could mean about a $400 annual rise in out-of-pocket premium costs for coverage through the workplace, based on the average amount workers paid in 2023.
Homeowners Insurance
2023 saw homeowners insurance companies exiting high-risk areas due to severe storms, flooding, hurricanes, and wildfires. This led to a significant increase in home insurance premiums, rising by 21% in the year, according to Policygenius. The trend will continue in 2024, driven by more severe weather and limited insurance options. Notable companies like Farmers Insurance, State Farm, and Allstate pulled back from certain regions, impacting homeowners who had to resort to excess and surplus insurers at potentially exorbitant prices.
Restaurant Food
Economic forecasts by the U.S. Department of Agriculture (USDA) predict that “food away from home” or restaurant food is expected to see a price increase of about 5% in 2024, with a projected range of 3.2% to 6.6%. On the flip side, “food at home” or groceries are expected to experience a drop in price by 0.6%, indicating a form of deflation in this category. This information might encourage more people to consider cooking at home as a cost-saving measure.
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Sources
- “Money Experts Say These 8 Things Will Cost Less in 2024.” Reader’s Digest. Colleen Oakley. October 18, 2023
- “5 Things That Will Get More Expensive in 2024 Even as Inflation Falls.” Nasdaq. Adam Hardy. December 27, 2023