What Will Cost More In 2015
While everyone is rejoicing with the lower gas prices in the last quarter of 2014, there are some things that will undoubtedly go up in the new year. Here are the top five you’ll see:
1. Coffee and bourbon. The cost of two popular beverages is likely to increase in the coming year due to supply and demand. Coffee prices were forecast to drop in 2014, but a severe drought in Brazil had the opposite effect, according to LoCastro. Starbucks raised prices last summer, as did several other coffee makers. Meanwhile, the rising popularity of bourbon has caused some distilleries to ration bottles and raise prices.
2. Food. Droughts in California are likely to drive up not only the cost of agricultural products like avocados, but also beef and pork products. “Producers with both beef and hogs have thinned their herds in response to drought conditions,” says Michael Levin, associate professor of marketing at Otterbein University in Westerville, Ohio.
3. Debt. The past few years have seen very low interest rates. However, that may change in 2015. “The Fed has eliminated quantitative easing [where a central bank purchases securities to lower interest rates and increase the supply of money], and is expected to let interest rates start to rise, so the cost of debt will go up,” Levin says.
4. Shipping. The U.S. Postal Service has chosen not to raise postage rates this January, but UPS and FedEx have announced shipping price increases for 2015. Of course, shipping costs have been gradually rising in recent years, with several price increases in stamps and retailers like Amazon raising their minimum threshold for free shipping from $25 to $35. Amazon also raised the cost of Amazon Prime (which includes free two-day shipping on most items) from $79 to $99 last spring.
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5. Travel. If you are planning a trip in 2015, consider budgeting a little more money for airfare and hotel stays. Despite lower fuel costs for airlines, carriers may raise prices (and certainly haven’t been shy about adding new fees) because of increased demand.