Financial Predictions for 2013

Happy New Year everyone! With the New Year comes a sense of change. We all make resolutions to do things differently than last year while hoping it leads to better health, happiness and wealth in 2013.


One thing that changes every year is prices. Every year it seems retailers and businesses usher in higher prices.  Little by little prices go up and we have to shell out more cash to cover our costs.

I didn’t want to start the New Year by telling you about how prices are going to inch up in 2013. It just didn’t seem right to start off with bad news. I’m feeling happy and looking forward to things to come this year. So instead of proclaiming doom and gloom, I’m happy to say there is some good news to report. Not everything will be more expensive in 2013!

In fact there are five things that will be cheaper this year compared to 2012. The reasons for this vary. Not everything is cheaper because prices went down. Some things are due to better technology and more options for consumers.

Travel

If you’ve ever dreamed of sailing the Mediterranean or jetting off to a romantic European city, then 2013 might be the best time to finally do it! Travel magazine Travel Weekly reports that prices for European vacations will be cheaper this year. A survey by travel company Cruise Holidays found that prices for a 12 day Mediterranean cruise average about $35 per person, per day, which is less than the average price at this time last year.

We’re also coming up on the cheapest time of year to fly to Europe. Flights that depart in February, March and early April have historically been less expensive than at any other time during the year.  That’s mostly because it’s the least busy time in the travel season throughout Europe. In turn, airlines and hotels lower prices to attract consumers. Although the weather might be a little chilly, if you have always wanted to see Paris or visit Rome, then this is definitely your time to book a European vacation.

Automobiles

Long time readers know that I grew up in an automotive family. My father worked for a car manufacturer his whole life as did his father. I have it on good authority (ok, ok, so I asked my Dad and Grandpa for their insight into this one) that prices for used cars are going to be a bit cheaper this year!

Over the last three years, used car prices have gone up. It’s been a boon for dealerships, but a bust for consumers. My Dad says this is because of depleted inventory. Car manufacturers have scrapped more cars than they’ve sold lately. And as anyone who is familiar with supply and demand knows that when you decrease the supply of an item, the demand goes up as do prices. As the year goes on, the prices for used cars should get better and better.
Drivers looking for new cars can expect to get a better deal on 2013 models as well. The compact and sub-compact car category is getting a boost because car manufacturers are adding more features that previously have only been found in luxury brands. Power windows, CD players and mp3 jacks have become standard features on some low end models. So while prices won’t necessarily be cheaper for these cars, you’ll be getting more bang for your buck in this category.

Flat-Screen TV’s

You can thank advances in technology and increased competition for this price drop. It’s costing television manufacturer’s less money to make flat-screen TV’s these days and they have passed on some of the savings to you and me.

The average price for a 32 inch set has dropped nearly 50% since 2010, from $600 to just below the $300 mark, says Mike Fridgen of price-comparison site Decide.com.

Increased competition among manufacturers and less demand should also help to push down prices for this particular electronic. Global demand for new TV sets fell four percent this year and is expected to stay flat for 2013, according to DisplaySearch, a division of research firm NPD Group.

Just make sure that because prices are cheaper, you don’t see this as an opportunity to buy a bigger set. That will erase all the savings you find this year on a new flat-screen TV.

Cable

Your cable bill won’t actually go down in 2013. In all actuality it will probably go up. Prices for expanded basic service rose 5.4% in 2011 from the previous year, according to the FCC. But increased cable options for consumers can save you from having to shell out more money for this monthly service.

I’ve written to you about this topic several times in the past. There are alternatives to paid television. In fact, as the years go by there are more and more choices to watch TV without the expensive monthly service. And more and more people are flocking to these options. During the second quarter of 2012, cable providers lost an estimated 400,000 subscribers and 127,000 in the third quarter, according to research firm Sanford C. Bernstein.

Providers like Netflix, Hulu and Amazon have seen a surge in their streaming business. A report by The Convergence Consulting Group of Toronto estimates that consumers who have dropped their cable or satellite subscriptions in favor of the alternatives will number 3.58 million, or 3.6 percent of U.S. TV subscribers by the end of 2012.

The more competition to providers like Comcast, AT&T and satellite companies, the better our options for cheaper TV watching will be.

E-Books

Anyone who owns a Kindle Fire or Apple iPad already knows that prices for e-books are cheaper than they are in print. Barnes & Noble, for one, sells the novel “Gone Girl” in hardcover for $14.34 and as an e-book for $12.99.

Well, that price gap could widen in 2013. The Justice Department just settled a lawsuit with four publishers that alleged they conspired to raise e-book prices. The settlements open the door for more price based competition thus resulting in cheaper prices for consumers.

At least there are a few things that won’t cost us more money over the next 12 months. With inflation and a recovering economy to drive up prices saying so is not something I get to do very often.

Happy New Year from the Patterson Family and League of Power staff.  It is our sincere hope that one of your New Year’s resolutions involves taking control of your financial freedom. Let this be the year you decide to stop working for the man and become THE MAN. Remember to check back here every Wednesday to find out more ways to save money in your daily life.

Keeping Money in Your Pocket,

Nancy Patterson

Some information has been adapted from an article that appeared in the Wall Street Journal.


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