﻿Inflation is hitting categories like gasoline, airfare and food pretty hard. In some places like
California, gasoline is well above $6 dollars a gallon. This means that if you drive a car
with a 15 gallon gas tank, you will need to pay close to $100 dollars to fill up your car. Makes
you think twice before driving somewhere right? But what’s interesting is that according to the
latest Consumer Price Index, the CPI, there are categories where prices are actually going down.
So, if you play your cards right, even in this time of high inflation, you can save money on
your purchases. Hi, if you are new to the channel, my name is Tae from Financial Tortoise. Where we
learn to grow our wealth, slow and steady. Today we are going to review 10 categories that are
actually getting cheaper according to the latest Consumer Price Index. Number one category that is
dropping in prices is jewelry and watches. It’s a small decline, but on average jewelry and watches
are 0.6% cheaper now compared to the same time last year. And if you are a watch enthusiast,
You might have noticed that there’s been a bit of a watch market bubble the past year.
High end watches like stainless steel Rolex were apparently selling for multiple times its retail
price. And there were similar trends in jewelry as well. During the pandemic Jewelry sales went
through the roof pushing prices higher. Being stuck at home, American consumers passed the time
buying tons of stuff. And apparently, a lot of nice stuff like jewelry and watches. However,
what goes up must come down. Now with inflation running at a 40-year high, consumers are getting
squeezed in all the essential areas, like food, gas, utilities and housing. And that leaves less
money for discretionary spending, like jewelry and watches. Less demand, lower the price. So if the
high prices of watches and jewelry have kept you out of the market the past couple years,
now might be a good time to look into it again. Don’t go overboard, but consider it a nice treat
for having survived the past couple years. Number 2 item where prices have dropped is in cell phone
service at 0.7%. The U.S. wireless telephone market is dominated by three big companies - AT&T,
Verizon and T-Mobile. And the competition between these companies is pretty fierce.
Ads to acquire new customers are everywhere. They are constantly promoting new deals to entice
people to switch wireless carriers. And companies are even buying each other out in order to become
bigger providers. Though the ads could be a bit annoying, at the end of the day, competition is
a good thing for customers. Competition either increases product quality and/or lowers costs.
In the case of wireless telephone services, it has helped to lower prices. From 1997 to 2022, the
cost of wireless service﻿﻿ fell 51.9﻿﻿ percent, an average annual decline of 2.﻿9 percent. Although
the decline has slowed in the past 12 months, it’s still relatively cheaper to have wireless service
than landline. So despite the high inflation cost, you likely won’t need to cut back your cell
phone service anytime soon if you’ve been able to afford it. Number 3 item where prices have dropped
is pretty specific. Men's pants and shorts at a decline in prices of 1.6% compared to the same
time last year. It’s hard to say exactly what’s driving this, but nonetheless if you need to
replace your shorts and pants, it might be a good time to do so. I personally only shop for clothes
once or twice a year. Most often at an outlet or when there is a big sale. And I am able to extend
the life of most of my clothes because when there is a tear or a cut, instead of buying a new one,
I get it mended at my local dry cleaners. If you are into fashion, you might not prefer this frugal
method, but for a simple minded man like me, I’m completely happy saving money and time through
this method. So if you’ve been in the market for a new pair of men’s shorts or pants, now might be
a good time before prices start going up again. Number 4 category where prices have dropped is in
Computer Software and Accessories. Compared to the same time last year, software and accessories are
now 3.9% cheaper. Of course there is a catch. Most software have now moved to a subscription basis,
which means you pay less initially, but could pay more over time based on how long you keep
using it. But basic gadgets such as keyboard and mouse are now basically commodities. Thus their
only real competitive advantage is price and with time, have continuously gotten cheaper. Technology
companies will continue to update their software and create machines that will run faster and
cheaper than their competitors. So, if you are in the market for new software or accessories,
now might be a good time to buy. Number 5 item where prices have dropped is in ship fare at 3.7%.
This really only affects a small subset of the population, but if your commute involves
a ferry or ship of some kind, average fares have actually gone down in the past year. An
interesting outlier given the cost of public transit on the whole is up nearly 22%. So if
you live in a state where ferries are common. Think New York, Rhode Island and Washington,
continue to take advantage of affordable ferry costs. However, this doesn’t apply to other ships
like cruise ships. I’ll cover it in a bit, but travel categories like airfare and hotels are
on the rise. So if you are planning a cruise anytime soon, don’t expect cruise ship costs
to be cheaper. Number 6 items where prices have dropped are Audio and Video Equipment.
A drop in price of 5.2% compared to the same time last year. And this drop in prices is part
of a long-term trend in goods that decline in prices due to technological advancement.
The video equipment industry is a good example. 10 to 15 years ago, before YouTube became mainstream,
there weren’t as many companies making video, audio equipment and associated accessories. But
with the increased demand combined with the boom of the DSLR cameras and LED lighting technology,
there appeared more options which overall drove the price down. Of course there is constantly new
equipment with new features that are priced higher to entice customers to upgrade. But older models
are getting cheaper and if you are kind of like me, ok with good enough. Then this is a great time
to purchase that video and audio equipment that you always wanted. Just to give you an example,
the camera and audio equipment that I’m using for this youtube video are not the latest gadgets
at all. Actually they had already been on the market a couple years before I purchased them.
Hopefully the video quality difference doesn’t deter you from watching the rest of this video.
The number 7 category where prices have dropped is closely tied to Audio and Video Equipment. And
that is television. A drop in price of a whopping 9.5% compared to the same time last year. And this
drop in prices is again part of a long-term trend in goods that decline in prices due to better
technology. When television sets first emerged in the 1950s, they were considered luxury items, with
only a few households able to afford them. But as they became more affordable, they became a normal
household item pretty quickly. And televisions are constantly being supplanted by newer technologies
pushing prices of existing products lower. If you aren’t too married to having the
latest model television, you should be able to purchase them cheaper now compared to last year.
Number 8 category where prices have dropped is in admission to sporting events at a whopping -10.8%
decline in prices. With the world recovering from COVID-19 pandemic, many sports fans had been
hesitant to sit in a stadium with thousands of strangers. And at the beginning of the pandemic,
the sporting industry was hit pretty hard. Not only were games canceled due to COVID risks, but
even when teams did get to play, they were playing at an empty stadium. Now with restrictions easing,
and a nice drop in prices from last year, many fans can start attending games in person. So if
you’ve been thinking about seeing that baseball or basketball game in person, now might be the
time to purchase that ticket before all the sports fans start pushing the prices up again.
Number 9 category where prices have dropped is in the category of smartphones. Compared to the same
time last year, the average price of smartphones is 19.9% cheaper. Now top-of-the-line smartphones,
like the latest iPhone, are still as expensive as ever. However, more affordable phones from
companies like Samsung, TCL and Motorola have carved a big enough slice of the market to bring
prices down across the board. And they had to do this due to the overall smartphone demand being
down. Given the rise in prices in all other areas, many people decided that their current phone was
good enough and held off on upgrading. And a way to ensure that you extend the life of your cell
phone as long as possible is by making sure you have good protection. Whenever we get a new cell
phone or a new device like an ipad, I always make sure to order a durable case and a screen
protector with it. I don’t know how many times my kids or I have accidentally dropped our device
that could have resulted in needing to fork out several hundreds dollars for a new device. However
if you’ve been in the market to upgrade your cell phone, right now would be a good time to do that.
Number 10 category where prices have dropped is food at schools. It is a whopping 43.5% cheaper
than last year. But this isn’t due to any cheaper food or decline in demand. It’s thanks to uncle
Sam. The federal government expanded the school lunch program as part of the effort to help those
hurt most by COVID. The Families First Coronavirus Response Act of 2020, signed in March of that
year, authorized special waivers for school lunches and allowed schools to distribute meals at
drive-through sites. However those waivers could end soon as the pandemic measures wind down. If
the Congress does not extend the provision, more students will have to pay more for their lunches,
and by midsummer, school lunches could wind up near the top of the list of the biggest price
increases. Hopefully we’ll see some positive news from Congress, but if you have kids in
public schools like me, consider the possibility that we’ll need to start budgeting for our kids’
lunches. That’s it guys. The high inflation is affecting us all, but we can always choose to see
the silver lining in all situations. Hopefully we can all find a category where we see opportunities
vs challenges. If you like to learn more about categories where I don’t like spending money on,
regardless of inflation, check out my video here. Thank you again and until next time, all the best.