Gas prices in Los Angeles and throughout California are slowly dropping, but we’re still paying a lot more at the pump than in recent years–and more than most of the rest of the United States. As of July 7, the average gas price in Los Angeles County is $6.19. That’s down $.18, or about 2.8%, compared with one month ago. But, it’s still $1.88 higher than one year ago, and $1.44 higher than the current national average.
Those in other countries are seeing even higher prices. This summer Italy and Ireland both approached $8.00/gallon, and Israel, Germany, and France all hit per-gallon costs between $8.00 and $9.00.
But, others have had it even worse. In the Netherlands, Greece, and Finland, gas prices climbed to between $9.00 and $10.00/gallon. Norway and Denmark both topped $10.00/gallon, and in Hong Kong average prices surpassed $11.00/gallon.
Of course, knowing that others have it worse doesn’t do much to lessen the burden or make it easier to pay the bills. With the price of gas, groceries, and other essentials high, people in Los Angeles and around the country are making changes.
Strategies for Managing Inflation
When the budget no longer balances, there are just two ways to make ends meet: increase income or cut expenses. The good news is that many Americans have seen an increase in income over the past year or so. Nationwide, wages jumped about 4.5% from the end of 2020 to the end of 2021.
As of the beginning of July, minimum wage in the City of Los Angeles increased from $15.00/hour to $16.04/hour. And, those in some industries have higher minimum wages.
Still, the increased income hasn’t entirely absorbed the increase in costs. In May, the annual inflation rate was 8.4%. And, of course, certain costs have increased even more. From July 2021 to July 2022, California gas prices are up more than 43%.
Here’s what some Americans are doing to keep costs under control.
The pandemic took a financial toll in many ways, and many in Los Angeles and around the country started implementing cost cutting measures even before gas prices and other essentials hit the high costs we’re seeing today.
Early this spring, First National Bank of Omaha (FNBO) conducted its annual Financial Wellness Survey and found that a significant percentage of respondents were cutting non-essential expenditures. Streaming services led the list of cuts, with more than 90% saying they’d be letting go of at least one subscription. Other target areas included:
- Eating out (64% said they’d be cutting back)
- Clothes and personal items (49% planned to reduce expenditures in this area)
- Technology upgrades (43% said they’d be skipping or delaying upgrades)
- Gym memberships (29% planned to cancel)
A more recent survey conducted by Provident Bank found that 83% of respondents were cutting expenses. 10.5% said they planned to cut out all non-essential expenses. Other cuts mentioned included:
- Cutting back on or delaying travel
- Quitting smoking
- Making coffee at home instead of purchasing
- Buying generics or store brands
- Spreading out personal care, such as visits to the hair salon
Cutting back on non-essentials can be a smart way to get through a tough financial patch–especially if you expect it to be temporary. More than half of respondents to the Provident survey said they expected to be better off financially at this time next year.
Unfortunately, sometimes the shortages spill over into essentials.
Cutting Back on Essentials
31% of respondents to the FNBO survey said they planned to cut back on housing expenses. While downsizing, taking on a roommate, and otherwise reducing housing costs can be a smart move when you have room to do so, the high percentage of people looking to cut back in this essential area illustrates how serious the current financial situation is for many.
Another survey revealed even more alarming effects. Most US women responding to Healthily’s cost of living survey reported that they were cutting back on treats, luxury items, gifts, and self-care in response to financial stress. But that was only the beginning.
- Nearly half said they’d skipped meals to save money
- More than half are buying frozen instead of fresh food to cut costs
- More than half say they’re cutting back on or delaying dental care
- More than one-third have delayed medical care
- More than 20% said they were stretching medications
- Nearly 20% had let go of or cut back on medical insurance coverage
Making Smart Decisions about Cost-Cutting
We all have to cut corners or find a way to reduce expenses from time to time, and in 2022 people across the country and around the world are in that situation together. Some experts are warning that we may be heading into a recession, meaning the financial landscape may get worse before it gets better.
As you navigate those changes, it’s important to recognize which expenses you can reasonably cut and when it’s time to find a more lasting solution. If times are tough, you can probably do without your streaming services, your $8 morning latte, and even your family vacation for a few months, a year, or even longer.
But, if you’re skipping meals, not filling your prescriptions, delaying medical care, and otherwise putting your longer-term health and welfare at risk, it’s time to examine your options. That may mean checking into whether you qualify for assistance with food, medical expenses, housing, and other essentials.
An expert tip from Barry
It may mean making one more significant cut, such as sharing a car with your spouse for a while and eliminating an auto loan payment and half the cost of your car insurance. Or, it may mean exploring how you may be able to get out from under debt, such as discharging credit card debt in Chapter 7 bankruptcy.
At Borowitz & Clark, we’ve devoted our practice to helping people in and around Los Angeles who are struggling with debt. If you’re stretched too thin and unsecured debt such as personal loans, credit card debt, medical bills, and payday loans is eating up funds you could be using for essentials, learn more about how we may be able to help. Just call 877-439-9717 or fill out the contact form on this page to schedule your free consultation.