There are probably certain goods or services that you’ve been purchasing on a regular basis for years, if not decades. And over time, you’ve likely become familiar with how much these things cost, and, in turn, whether something is inexpensive, overpriced, or seems about right.
But lately — especially since the annual inflation rate rose to a four-decade high of 8.5% in March — it seems like nothing is a good (or even decent) value. As frustrating as that is, it also makes sense under the current circumstances, according to a recent article in the Wall Street Journal. Here are a few strategies for coming to terms with our new financial reality.
Understand (and accept) that prices will change
According to Scott Rick, an associate professor of marketing at the University of Michigan who studies financial decision making, the current inflation rate is particularly jarring to people under the age of 40, who he says have never experienced a jump in prices like this before.
And unfortunately, it’s something everyone will have to get used to. “There’s no going back to the way things were,” he told the Wall Street Journal. “You have to update and roll with it.”
So instead of digging our heels in and refusing to adjust our perception of what prices should be, Rick says it’s important to understand and accept that rethinking our concept of what constitutes a good value is an ongoing process.
Continue to do your research
But accepting that costs will continue to increase over time doesn’t mean that we should stop doing our homework before making a major purchase, David Wessel, director of the Hutchins Centre on Fiscal and Monetary Policy at the Brookings Institution, points out in the same Wall Street Journal article.
During a period with this type of inflation, it’s easy to approach big-ticket items with the mindset that because everything is expensive now, there’s no point putting in the time and effort to find them at lower prices, he explains. But these people are more likely to accept the first price they come across — which may not be the best value, Wessel adds.
Instead of doing that, he recommends doing price comparisons and plenty of research, including asking friends or peers what they paid for similar items.