Money·5 min read

Skimm Money: Sales Up, Skimpflation, and Giving Thanks

types of inflation
Design: theSkimm | Photo: iStock
Nov 19, 2021

This newsletter is brought to you by the letter "I," for inflation. But there is some money news to be thankful for: a judge finally #FreedBritney. Higher wages and savings balances from 2020 are keeping people in the holiday (spending) spirit...which is good for the economy. And after years of speculation, the great "who really created Bitcoin?" mystery could be finally solved.

Headlines, Skimm'd

  • Big spending. This morning, the House (narrowly) passed the $1.9 trillion social and climate spending bill. It's got funding for child care (including universal pre-K), a one-year extension of the expanded child tax credit, and paid family leave. And is projected to add $367 billion to the federal deficit over the next decade, according to the Congressional Budget Office, not counting additional tax revenues. Next step: (challenges in) the Senate. 

  • Retail's new heights. Consumer spending jumped 1.7% in October, up for the third straight month. The downside: more spending puts more demand on already-strained supply chains. And pushes prices even higher.

  • (No) tariff talk. President Joe Biden and China's President Xi Jinping met virtually Monday for the first time in Biden's presidency. Some (two dozen business groups and Treasury Sec Janet Yellen) wanted them to discuss tariffs imposed by the Trump admin that fueled a trade war between the two nations, arguing that lowering or nixing the special taxes on imports could help lower inflation. The leaders didn't take any actions on tariffs yet, but many say talking at all is a positive step in the complicated relationship.

Let's Talk About…

Design: theSkimm | Photo: iStock

What's Got Everyone Saying 'What's Up With That'?

Inflation...what else? Higher prices are only one way it can hit your wallet. Meet inflation's sneaky cousins: shrinkflation, aka when a product's size gets smaller, but the price stays the same. And skimpflation — when companies cut corners on labor and services (and your experience) without dropping prices. There's nothing you can do to stop inflation. (Although Biden's asking the Federal Trade Commission to look into what could stop rising gas prices.) But being smart about your money habits can help you beat it.

Make Good (Money) Choices

If you're afraid Turkey Day will cost a wing and a leg…

Serve up a little flexibility. Inflation and labor shortages have created more Thanksgiving dinner problems than your weird uncle's unpopular opinions. So your meal could cost more than you planned...if all your ingredients are even available. A few ways to feast on a budget: Buy generic over brand names. Downsize your guest list and menu (three casseroles are almost as good as four). And be open to new mains. Turkey prices have nearly doubled since 2019. If chicken, ham, or fish is cheaper, who says you have to stick with tradition?

If awkward family convos are still on the menu...

Add money to the talking points. Millennials are increasingly joining the "sandwich generation." As in, those stuck in the middle of providing (unpaid) care for both kids and aging relatives. If that includes you, get on the same page about your parents' financial plans ASAP. Because as uncomfortable as it might be, planning ahead is better than figuring it all out on the fly later. Pro tip: start broad. You could mention how the pandemic has hurt many people's finances. Or talk about your own situation. Then ask how they're doing. Digging into the details can come later. 

Design: theSkimm | Photo: iStock

If you want to thank the people who make your life easier...

Give them a holiday tip. Start by making a list of who you might owe some gratitude. Think: your doorman, dog walker, babysitter, and garbage collector. Then consider who gets how much. If big cash tips don't fit in your holiday budget, consider pooling together with neighbors, crafting a small gift, or baking a treat instead. A personal note can also go a long way. And acknowledge that a smaller tip doesn't mean you appreciate them less. 

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