I might not have mentioned it, but I’m in Los Angeles this week, staying at a swanky hotel called The Omni. (I’ll tell you more about it after my stay, but it’s essentially free.) They dropped off a copy of USA Today yesterday and for the first in months, I read a physical newspaper. It’s a general interest newspaper, but the front page seem dominated by financial concerns. There is a “Nation’s gas gauge” in the top left showing how much the price of gas has changed in the last day and the price a year ago. (It’s 37% more expensive for the regular stuff in case you were wondering.) The cover story was, As food costs soar, it’s back to basics for meal planners. At least they didn’t have an article on adjustable rate mortgages rising and people foreclosuring on homes. Maybe the editor didn’t want to depress everyone on the same day.
That’s what America is faced with today. Food prices through the roof. Gas prices through the roof. Home prices through the roof. It’s going to cost you more money to commute to your job. The money you make there is going to less quantity or quality of food. Then you come home and worry about how you are going to pay the mortgage. At least basic clothing is relatively cheap, right?
As Ben Stein says, this isn’t so much of a problem for the highly skilled/educated lawyers, doctors, investment bankers, etc. When you bring in six figures or more, you can usually a few hundred dollars a month. However, if you are on the lower pay scale you likely have bigger problems. The rise of gas and food is huge. When you might have been scraping by before you might be in even bigger trouble now. In the aforementioned article, Ben Stein is quick to point out that “Since , real wages both hourly and weekly for all non-government workers, on average, have fallen by about 5 percent, very roughly.”
I’d like to revisit that USA Today article on food costs. It is filled with anecdotal evidence of people reacting to food costs:
- Retirees Sally and Robert Jones reverted back to some of the menus that got them through graduate school, living on beans, stews, and soups.
- Nancy Sierra eats peanut butter and jelly sandwiches for lunch.
- Tiffany Nicosia whips up new recipes with whatever is left in her refrigerator.
- Rebecca Woods and her family of five saw their grocery bills double from $800 to $1,600 a month.
However, the part that I want to focus on is the Rebecca Woods quote:
“We were eating whatever we wanted “” yogurt, bagels, name-brand cereals. I wasn’t looking at the price of anything. I was at the point where I bought the same thing every week. I ran into the grocery, I bought what I needed and ran out.” Later she says, “I realized we were sinking financially and couldn’t go on that way.”
Are you like Rebecca was – spending money without looking at the prices? Do you know someone who is? Do them a favor and use the little e-mail icon at the end of this story to send them this article.