There’s a dirty word that’s made a comeback in economic circles.
It has nothing to do with a pandemic-related increase in a Lead Dad’s waist size. But if that increase has occurred those new pants are going to cost more.
In January, the inflation rate was 7.5 percent – that’s five times higher than last January and the highest rate since Ronald Reagan was president.
By one estimate that means the average Lead Dad is spending several hundred dollars more each month on essentials. But no one needs to be told that. Anyone who has shopped for milk, meat or gas in the past six months knows that.
And try buying a new or used car, with dealerships openly jacking up prices for new cars. A Washington Post story said 82 percent of car buyers paid above list price last month. (One that hasn’t done that is the Penske Automotive Group, which doesn’t allow its dealerships to sell for above the MSRP – something we benefitted from on a recent car purchase.)
So what can you do? Don’t buy a car now. But beyond avoiding big purchases, there’s little an individual can do, since this an economic trend beyond individual control. Sure, you can shop around for lower prices on milk, gas and meat, and there’s real savings to be had if you have the time to put into finding deals.
More generally for Lead Dads with less time and a fixed budget, this is a great time to have family discussions about needs vs wants. Children who understand that distinction – need is a meal with a source of protein; want is filet mignon with sauteed spinach and mushrooms topped with black truffles – are going to have a leg-up in life.
Several years back I wrote about parents talking to their children about balancing needs and wants in this New York Times column. That piece ran at a time when most couples with children had never lived through inflation. The lesson in that piece is the lesson today: it’s not easy to talk and plan family financial decisions, but it pays off over time.