How The High Inflation Rate Will Affect Your Christmas

Santa Surprised by high inflation

Why Christmas Won’t Be Cheap This Year

It’s that time of year again. The smell of cinnamon, cloves and ginger fills the air; department stores are filled with people frantically searching for gifts, and advertisements everywhere you look, tell you that this is the most wonderful time of the year. In short: the Christmas season has once again arrived!

And while we all love this magical time of year but this year it comes with an even more hefty price tag. From decorations to presents, everything related to Christmas will cost a lot more this year.
With high inflation and interest rates, we will all have to take more care in how we spend our hard-earned dollars.

If you’re interested in hearing more (or simply want to support us) read on!

Why Christmas Will Be Way More Expensive This Year

The first and most obvious reason is inflation. When we look at the costs of goods and services, inflation means that the price of everything has increased. And since the demand for Christmas goods and services is incredibly high, the prices for these items are pushed up, making them cost even more. This increase in prices doesn’t happen evenly, however. There are certain years like this year, where the increase in prices is especially noticeable. This is caused by inflation, war and economic uncertainty. These events or situations have an enormous impact on the global economy as a whole.

Shopping Will Be A Pain

When shopping for Christmas presents, you’ll probably notice that prices have risen dramatically. Not only has inflation made goods more expensive, but many retailers are beginning to adopt a new strategy called ‘price engineering’. What this basically means is that they’re working hard to make their goods more expensive – while still maintaining the same profit margins. As a result, you’ll find that the prices of many different products (not just Christmas gifts) are on the rise. This is also due to the fact that retailers want to maximise their profits. Increasing prices helps them do this, as it allows them to charge more for the same thing, using inflation as a cover for increasing their prices more than is necessary to maintain their profits.

Gifts Are Going to Be Super Expensive

With inflation, the costs of goods and services will go up. However, not all goods. Certain goods actually become cheaper over time. This is particularly true for electronics – which have been getting cheaper and cheaper over time (like TVs). As a result, the relative price of certain gifts has been decreasing for years. However, this year is very different. The price of electronics may actually go up, way up.
Almost all your gifts are going to cost you more this year and there is no way around it.

Transportation prices and the difficulties in the supply chain are going to make gifts very, very expensive.

Christmas Bauble

Decoration Prices Will Be Extremely High

Decorations have actually become significantly more expensive over the years. This year the prices are going to be crazy. The demand for decorations normally goes up during this time of year but this year is expected to get even worse. So if you’ve been planning on decorating your house for Christmas, you can expect to spend a lot more than you would have in previous years.

Food Costs Will Be Through The Roof Turkey

The cost of food has been going up rapidly for a while now. This is because of the growing demand and shortages caused by supply constraints and increases in the cost of fertilizers and feed. The change in climate around the world has had a dramatic effect on food production as well. The war in Ukraine has caused energy shortages as well as grain shortages around the world. This is all expected to increase even further. Food prices will keep going up, as long as these factors are still in play.

How Can You Keep Costs Down?

Many of the price increases can be attributed to inflation, but a lot of it is just pure greed on the part of big manufacturers and big retailers. This means that you need to be more careful than ever with your Christmas shopping. You need to make sure that you don’t get sucked into paying more than you’d expect for certain products. Because if you don’t, Christmas may end up costing you a small fortune.

Here are some tips:

  1. Shop Local. This reduces the transportation costs
  2. Shop Small. Small retailers do not usually hike prices unless they really have to.
  3. Try buying online from a local gift shop. If you buy a few gifts you may even get free shipping.
  4. Choose your gifts wisely – One small high-quality gift per person is better than a lot of expensive junk. The kids don’t need 10 gifts each and neither do the adults.
  5. Try not to buy big ticket items for Christmas, it’s going to cost more at this time of the year, no matter what discount is offered. In February there may be bigger discounts.
  6. Make the decorations yourself. The kids can help – great fun. Cut decorations to a minimum or dig out the old stuff that everybody has stored somewhere in the house.
  7. FOOD – The Biggie. You can splurge a little here on one must-have item, like a turkey or a roast. Make a lot of relatively cheap sides like pasta, potatoes, and salads(homemade). Use frozen vegetables, they are much cheaper and actually better than so-called “fresh” vegetables at this time of the year. (Here’s an idea – defrost frozen veg, mix and stir fry. You can add a little protein or pasta – Yum and cheap). Make a fruit salad with canned fruit and serve it with some store-brand ice cream – delicious.

Where there’s a will there’s a way.

If you have any other cost-saving ideas, please share them with us.

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