As you budget for the rising oil prices, you are likely considering only the extra money you will need for gasoline or heating your home. However, because the costs of other products and services are dictated by the price of oil, you will need to adjust accordingly. Here are some examples:
Groceries
Anyone who has been to the grocery store in recent months is keenly aware of escalating prices. Why? Other than the plastic packaging (see “plastics” below), these groceries, which are trucked to your local store, will cost your grocer more because of the higher transportation costs. You will be charged accordingly.
Tip 1: Grow your own vegetables. You will enjoy the gardening process and save money at the same time.
Tip 2: Buy locally, if possible. We have a “farmer’s market” in our community where local farmers bring their produce to town, set up their booths and compete with other local farmers. We love not only the fresh veggies, but also helping support our local economy. Besides…we save money!
Health care
Many of the medicines and medical products that we use daily consist of petroleum, and as oil prices rise, so will with prices of these medicines and medical care. Stethoscopes, operating gloves and syringes are all made from petroleum, which could raise the price of many medical services which use these items. Also, medications, such as aspirin, nasal decongestants, cough syrup, and vitamins, contain petroleum, so consumers can expect to see a rise in their price as well.
Tip 1: You have heard it before, but it bears repeating: allow the prospect of rising health costs be your motivator to take care of yourself. Don’t just talk about eating right and exercising…do it! Find an accountability partner or partners and get started…today!
Tip 2: Maintain good health insurance. You can’t afford to not have it.
Plastics
Plastic, one of the most widely used products in the world, is a by-product of petroleum. As oil prices rise, the prices of plastics used in house items, such as milk and other bottle beverages, will increase. Many companies that distribute items, such as soft drinks and prepackaged food items, take an extra hit, since they must pay higher transportation prices and include higher packaging costs. Even toys, lenses for eyeglasses, and athletic shoes can expect to see a hike in prices as oil prices continue to rise, since they are all made from petroleum.
Tip: Monitor your spending. Do you really need bottled water? Could you buy fresh vegetables instead of prepackaged?
Clothing
“In addition to the rising cost of transportation, clothing items made from rayon, polyester, nylon, or artificial furs can all expect a rise in price, due to petroleum content,” said Charles Bulger from Currencies.com. Consumers should keep this in mind when budgeting for their next shopping excursion, whether it be the annual school shopping event or purchasing necessary seasonal clothing.
Tip: Consider shopping for your clothing at yard sales or consignment stores. You will not only find some great bargains, but you will be “buying green” and often helping a charitable organization who operates the store … a true win-win.
Some Closing Tips
- Consider your investment strategies. Of course knowledge is key, so I recommend you work with an investment professional to maintain a balanced investment portfolio focused on meeting your goals. But now may be a good time to invest in oil, pharmaceuticals, or commodities such as corn and soybeans.
- Monitor your budget. You know that gasoline, groceries, health care, plastic products and clothing are costing you more. If you can’t change your spending habits to buy less of these items, you must adjust your budget accordingly. You may need to eat out less, travel less or perhaps become a one car family. Discuss these choices with your spouse and agree on where to cut.
Don’t allow yourself to be overwhelmed by events you can’t control; instead take control of your finances, adjust where you can and continue to enjoy life. You can do it.
Readers: How do you cope with these rising costs? Any tips we haven’t considered in this post?
Very good article Joe. I guess almost all things are greatly affected by increase of petroleum prices. Even service-oriented businesses have increased their fees due to transportation costs. Thanks for stressing that we should not be confounded by events beyond our control – yes, we can continue enjoying our life and exploring things on how to effectively manage manage our finances in one great key.
Good ideas! Choices, the choices we make affect short and long term goals. As you point out we are more in control then we realize.
Great list of tips that everyone can put to use today!!
Joe,
Timely article, and a subject that I am passionate about too. Going local will be a trending theme as transportation costs rise. We’ll see this not only on a micro level, with our groceries, but also at the macro level. One impact may be the return of some manufacturing jobs that were shipped overseas to take advantage of cheap labor and transportation costs. No matter how you look at it, oil is problematic.
Joe, maybe we should go back to using our heads and figuring out ways to cut back. We have seen prices rise before and go back down when consumption is reduced. It will happen again. The days of $5.00 gas aren’t here yet. The sky isn’t falling quite yet.
Investing in energy is a good way to counteract the increase in prices. Oil companies, solar companies, etc will benefit from the increased profits as the cost of energy filters through the economy. Plus the dividends that many of these companies pay is a good way to earn during the periodic fluctuations in stock prices.
@Jasmine,
Yes, maintaining control of your finances and your life is a great habit to develop. One never knows what could happen, but a positive mindset will give confidence that one can indeed adapt.
@krantcents,
We ARE more in control that we give ourselves credit for. I never want to have “victim mentality”, and I bet you don’t either.
@Sheila,
Thanks.
@Hunter,
I hadn’t considered the “macro level” of higher oil prices, but you make some good — and positive points. Wouldn’t it be nice (for Americans) if some of those manufacturing jobs came back home?
@Dave,
What a novel idea: using our heads! You are right: the sky isn’t falling. But even if gas goes to $5 or more, we will still need to use our heads to make the proper adjustments. Like others have suggested, we must never think of ourselves as victims.
@optionsdude,
Thanks for validating one of my points.
I’m always shocked by the price of groceries nowadays – it costs more to get an apple than a bar of chocolate!
Considering the knock on costs of unhealthy eating on healthcare and days off work, it is a shame that the government do not have the foresight to make it cheaper for us to buy fruit and vegetables by helping the grocers.
But, yeah, growing your own is a good idea!