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- [00:06]
A
If it feels like everything costs more now, it's not just your imagination. Things do be more expensive. The cost of my haircuts just went up again. And now it's more than 25% of my take home pay. I get why Dave's bald now. It's way cheaper. Today we're gonna break down seven reasons why prices are out of control, and more importantly, what you can do to fight back. Okay, just so we're clear, there's not just one reason things are more expensive now. It's a whole plethora of factors. A cornucop, if you will. And one of the biggest reasons is inflation. Quick refresher. Inflation is basically when the general price of goods and services goes up over time, which essentially decreases the purchasing power of your money. Think of it like this. If inflation increases 3% yearly, that means what cost you $100 last year now costs you $103. So your dollar literally buys less stuff than it did before. Inflation can be caused by things like supply chain issues, massive government overspending, energy price swings, and massive government over spending. Quit printing the money. Turn the printer off. Turn the printer off. Okay, okay, okay, I'll do it now. I will say inflation isn't all that bad right now compared to recent years. At the time of this recording, it's around 2.7%. But back in 2021, the annual inflation rate was a whopping 7%. And at one point in 2022, inflation hit 9.1%, which was the highest it had been in 40 years. The problem is, even though inflation has cooled down, prices haven't gone back to where they were. The cost of goods is still going up. It's just not going up as fast. It's like if someone was punching you in the arm really hard and then they started punching you less hard, you're still getting punched. And that person is still incredibly annoying. So that's one reason things are more expensive. Another reason is shrinkflation. Shrinkflation is when companies keep the price the same, but give you less product. Very sneakily, I might add. Here's some real life examples people shared online, courtesy of our friends at BuzzFeed. Check out how much smaller the new Swiss rolls are compared to the old ones now with less diabetes. Now that is measurably smaller. And I like the banana for scale, although bananas range widely in size, so I don't know how that's even helped. Is that a tiny banana or is that a huge banana? No idea. But you can very much see the new ones Are, I would say, 30% smaller. And these Snickers ice cream bars went from six in a box to five while the price stayed the same. Dang, what I wouldn't give for a Snickers ice cream bar right now. Gosh, that looks good. 170 calorie. Okay, yeah, yeah. 5. I guess that we don't know if the price stayed the same, but, yeah, they're right next to each other. That's pretty wild. Shrinkflation's real. 100% real ice cream. Okay, good to know. Okay, here's a dirty one. Check this one out. Bigger bottle, less shampoo. How do you even accomplish that? Is there just more plastic on the inside? They went from 13.5 ounces to 12.5 ounces, but they just, like, increased the font size slightly and made the bottle slightly taller. I'm actually impressed. And here's a cool trick. If you're a company, you want to try this out? Maybe if you redesign the package, people won't notice you're ripping them off. Like this new Tropicana bottle that now includes 6 ounces less than the old one. That is the worst crime involving OJ since nevermind. And if you're under 40 watching this, just don't worry. Ask your mom. Tell her to stop texting me. But companies do this to us because they're betting we won't notice. And honestly, a lot of people don't. You grab your usual box of crackers, same price as always. But get home and wonder why you're still hungry after finishing the whole thing. Surprise. You just got shrunk. No. You don't even get to meet Ash. He's busy, hopefully making a sequel to Dude, Where's My Car? And this is not just BuzzFeed. This is gaining national attention thanks to this clip of BJ Novak calling out Cadbury.
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So I'm thinking, okay, I have stashed away Easter candy for years. You know, for the course of the year, I must have somewhere, I must have a Cadbury egg from previous year. I look through all the cabinets in my house, I find a Cadbury Creme egg from a couple years ago, and I brought it.
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This is one.
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This is this year's Cabaret egg. Not the mini egg. Not the mini Creme egg. This is this year's egg. Yes, this is the egg from a couple years ago.
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A
Look at that.
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Judge for yourself, America.
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And by the way, that was 18 years ago. So this is not a new concept. It's been happening a long time. And when you think about it, Shrinkflation is like psychological warfare on your wallet. They know that raising the price from 3.99 to 4.49 feels worse than keeping it at 3.99. But giving you 15% less product, even though 15% less product is actually a bigger price increase than the 50 cents. So this whole sneaky practice is very calculated and very intentional. And it's one reason your dollar doesn't go as far as it used to. Another reason, supply chain issues. Remember a few years ago when everybody was talking about supply chain issues? Well, it turns out those are still a thing, not just during a global pandemic. Here's the thing. A company might need parts from China, assembly in Mexico, and then shipping through a bunch of ports. And if there's a manufacturing problem or a shipping delay, that's gonna cost them money. And they're not just gonna eat that cost. They're gonna pass some or all of those costs onto the consumer. That's you. And that can cause the prices of things you love to go up and up and up. And there's all kinds of reasons for these supply chain issues. Geopolitical tensions, climate events affecting production, labor shortages, and shipping costs that are still higher than they used to be. I mean, take what's happening in the Red Sea right now. Houthi attacks on ships have four shipping companies standing to take much longer routes around Africa. Instead of using the shorter Suez Canal route, we're talking about an extra seven to nine days of shipping time, which adds millions in costs per ship. Thanks. Houthis and your Blowfish kick rocks and pound sand. What was their hit song from Houthis and the Blowfish? I don't even want to be with you. They don't want to be with you. I'm not Hootie. I'm Darius Rucker. All right, all right. Another reason things are getting more expensive. Corporate price gouging. Companies can use inflation as a cover to jack up prices, prices and pad their profits. So it's not always the economy. Sometimes it's just greed and increasing shareholder value. Like when inflation goes up 3%, but a company raises their prices 8% and then shrugs and says, hey, we do. Inflation's gonna inflate. Meanwhile, their profit margins are wider than your mom. Sorry, Suez Canal. You know what? Same difference. Same way as I walk through the Val, she stops texting me. I'm gonna keep it going. I'm sorry if your mom's actually watching this. I know she is. Moms love this channel. I don't know what it is. Choosy moms choose George. According to a recent study, corporate profits accounted for more than half of recent price increases. They dug through corporate earning call transcripts and found CEOs openly bragging to their shareholders about their ability to raise prices beyond their rising costs to increase profits. Now, look, I'm all for companies making money. There's nothing wrong with that. But just raising prices because people will assume it's inflation and you know, you can just get away with it. That's shady. Okay, Another reason things are expensive. Interest rates and debt. At the time of this recording, the federal funds rate is sitting between 4.25% and 4.5%. That's down from over 5% in 2024, but still way higher than the near zero rates we had for years after the 2008 financial crisis. And when interest rates are high, everything that involves borrowing money gets more expensive. Think car loans, mortgages, credit card debt. It all costs you more. And it's one of the reasons why I worked so hard to get out of debt and why I will never have debt again. I don't have to worry about interest rates because I pay zero interest, just like I did in my high school chemistry class. So if my calculations are correct, just one drop of this should do the trick. I think I missed a decimal point. If you're carrying debt and paying interest on it, you're making inflation worse for yourself. That $200 credit card payment every month is 200 bucks less that you have to fight rising prices. So don't do that to yourself. You're already getting screwed by little Debbie and her tiny Swiss rolls. Another thing, making stuff more expensive. Private equity takeovers. This is where a team of investors buys a company with the goal of increasing its value and then selling it for a profit later on down the road. It's like those HGTV shows, except instead of flipping houses, they're flipping entire companies. And one tactic they use to increase the value of a company is cutting costs to the bone while jacking up prices so customers get stuck paying more for worse products and even worse service. Here's a real life example. You remember when Toys R Us went under? Well, private equity played a huge role in loading that company with debt and tanking the overall customer experience. RIP Jeffrey. You didn't deserve it, bro. You didn't deserve it. That neck is so far up there. She's so high up. Tallest one in heaven. They say. If that's a joke, I love it. And sadly, we've seen this happen to nursing homes, veterinary Clinics and apartment complexes as they got bought up by these big firms, prices went up, quality went down, and consumers got the short end of the stick. Another reason things are real expensive right now, real estate and rent spikes. According to Zillow, the median rent in the US is now around 2,125 bucks per month. That's a lot. And here's the really depressing part. Rent increases have been outpacing wage growth in most areas, meaning housing costs are eating up a growing chunk of people's paychecks. So even if your Swiss rolls were the same size and the same price, you probably have less money to spend on those after you pay rent. But enough doom and gloom. There is some good news here. You're not powerless when it comes to higher prices. Sure, you can't control inflation or the Suez Canal, but you can control how you respond to these things. So let's talk about your strategy for fighting back. But before we get to that, let me ask you a question. Do you ever feel like a plastic bag just floating through the wind at one of these big corporate banks where you're just a number to them? Yeah. That's not okay. And that's why I'm pumped to announce a new partner for this show. Fairwinds Credit Union. And get this. They're not a bank, they're a credit union. Meaning they're owned by their members instead of Wall Street. And here's what I love about Fairwinds. They want to see people win with money. So much so they literally put up billboards encouraging people to get out of debt. Meanwhile, most banks solely exist to try to get you into more debt. So Fairwinds wants to see you win with money. And how do they do that with no junk FEES? With over 33,000 free ATMs and 5,000 plus credit union partners nationwide, so you're covered just about anywhere. So if you're tired of being a plastic bag and just another number, go check out Fairwinds@fairwinds.org Ramsey or use the link in the description below. And while I'm fighting back against inflation, I'm also fighting back against spammers and scammers trying to get my money. And the way I do that is with Delete Me, another sponsor of today's episode. It seems like every day there's a new scam to watch out for. But Delete Me helps cut the risk by removing my info from hundreds of data broker websites. And they don't just set it and forget it. They have real data privacy experts working behind the scenes all year long. And you even get a personalized report every few months so you know exactly where your info was, where it was removed from, and how much time they've saved you. And with my special link, you can get a discounted plan that comes out to about nine bucks a month, so don't wait. Take control of your privacy. Go to joindeleteme.com george or click the link in the description below. Okay, let's get back to your game plan to fight against the rising cost of everything. Here are five things you can do to fight back. First up, increase your income. If your income isn't keeping up with or beating inflation, you need to make more money now. This might mean finding ways to increase your full time income at work through raises, promotions or overtime. It could mean looking at side hustles like freelancing, consulting, tutoring, driving people around, delivering packages and food, or selling stuff online. Maybe it's time to switch jobs altogether into a career path that has a higher income potential. And sometimes the biggest raise you can get is the one that comes with a new job title at a different company. Next up, ditch the debt again. Debt makes inflation worse because every dollar you're paying in interest is a dollar you can't use to fight rising prices or build wealth for the future. And the best way to pay off your debt is with the debt snowball method. I made a whole video breaking down how that works and I'll drop a link in the description if you want to watch that next. The third way to fight back is to shop smart. It is time to get strategic with your spending and you can do that with the smart acronym from my book Breaking Free from Broke. So the S is for self awareness. Ask yourself this question what is the thing I want to buy? Is it going to add value to my life? If the answer is yes, move on to the M for motive. Am I buying this for the right reason? If you are, move on to A for affordability. Can I afford this in full right now with money I actually have? If the answer is yes, move on to R for research. Is this the best option, retailer and price? If you've done the research and move on to the T, is this the right time to buy this? That one's about opportunity cost. Are there other priorities that take precedence over this purchase? So there you go. Answer yes to all five. You can make that purchase with intentionality instead of impulse and regret, and also use browser extensions and websites that compare prices across different retailers to make sure that you're getting a good deal. Another great way to save money is to buy secondhand. Check out Facebook Marketplace, thrift stores and buy nothing groups in your area. Next Way to fight back Invest to beat Inflation Listen, you can't save your way to wealth, and especially if the interest you're earning in your savings account doesn't even keep up with inflation, you've got to be investing if you want to grow your money. And the best way to do that is by putting 15% of your income into retirement accounts like a 401k or a Roth IRA. Between the tax advantages and compound growth, inflation is going to barely leave a mark. In fact, three out of four millionaires said that regular, consistent investing over a long period of time was the key to their success. Next way to fight back Budget and lower your expenses if you want to fight inflation, intentionality with your money is key. And if the word budget makes you throw up a little in your mouth, that's fine. Call it an intentional spending plan as long as you're giving every dollar a job. Because when you know where all of your money's going, you can start to see where you can cut back and where you can spend more. And the app that I use to budget and track my expenses is called EveryDollar. It's a free download, super easy to use, and it does the math for you. So if you want to check it out, go to everydollar.com george or use the link in the description. Look, I want you to walk away from this video feeling empowered, not depressed and angry and shaking your fist at the sky. Yes, everything costs more than it used to and it's not cool. But you're not powerless here. A lot of people are making doom and gloom content on TikTok and Instagram telling you the sky is falling and you should just, I don't know, give up. But that's trash advice. You don't have to be a victim of circumstances here. There are things you can do today to fight back against high prices, get control of your money, and start to build some real wealth despite what's happening in the economy. And if you want some more strategies for doing this, check out this next video for 32 Ways to Save Money right now. Click the video to watch or use the link in the description. Don't forget to hit that like and subscribe button and share this video with your Swiss roll loving friend who just got shrunked. Thanks for watching. We'll see you next time. Oh, that's type A for sure.