If you’ve been suffering from post-pandemic sticker shock, you are not alone.
From gasoline and groceries to computers and clothing, everyday items are suddenly more expensive.
As the country recovers from the coronavirus outbreak and Americans are putting their economic checks and money in storage, some of those higher costs are simply the price consumers pay for an economic recovery. (In other words, when the economy picks up, so does inflation.)
In other cases, setbacks in the supply chain have weighed on certain goods, which also lead to higher prices, but only temporarily.
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“It’s kind of like the consumer version of musical chairs. There’s a bit of a rush for a limited range of things,” said Mark Hamrick, senior economic analyst at Bankrate.com.
But not everything gets dearer forever, said Hamrick. And if you’re considering making a larger purchase, it might be worth waiting for.
Here are some examples:
Anyone considering a bathroom remodel or kitchen renovation will see dramatically higher raw material prices.
The sky-high demand for home improvement coupled with the slowdown in the supply chain has caused some building materials, including lumber, steel, plaster of paris and copper, to hit record highs this year.
A broad mix of building materials for residential buildings has increased by 12.4% in the last 12 months according to the producer price index.
As a result, nearly half of all home builders say they add escalation clauses to their selling prices due to rising material costs, according to a recent survey by the National Association of Home Builders.
“It’s an unusual time triggered by the pandemic,” said Jack Kleinhenz, chief economist for the National Retail Federation. “I think people are realizing that we should wait a bit for things to get better.”
But if you are thinking of getting away instead of renovating your home, you are out of luck.
A sudden increase in wanderlust after the pandemic also makes vacation more expensive.
Domestic fares are up 9% since April 1, while international fares are up 17%, according to recent research from Amber. And an increase in bookings drives prices up even further.
Hotel prices are also higher, according to Koddi, a travel booking technology company, and have even exceeded pre-pandemic prices in some popular travel destinations.
Consumers with coupons from the plans canceled last year could take a break if they can take advantage of those credits.
“Many of us likely have stored value in services that we didn’t use during the pandemic,” Hamrick said. “At least it’s worth asking.”
If this happens, however, make reservations sooner rather than later, before flights and hotels are fully booked for the summer – or worse, those vouchers will expire.
Those planning to take to the streets now that pandemic-related restrictions are lifted may stall at the dealership.
High consumer demand and the lack of manufacturing microchips – vital parts needed to power today’s cars – have put new car inventories at dealerships across the country under pressure. And the used car market isn’t much better.
According to the Kelley Blue Book, new cars cost around $ 40,000 on average in April, up around 2.2% year over year. At the same time, the typical cost of a used car is around $ 23,000, according to Edmunds.
“New vehicles – especially new trucks and SUVs – are basically the same as toilet paper and hand sanitizer a year ago in 2021,” said Jessica Caldwell, Edmunds’ executive director of Insights, in a statement.
However, chip shortages are only expected to affect production until the end of summer or early fall, and prices generally decline towards the end of the year and into January when sellers try out last year’s models to unload.
Most of these price increases are temporary.
Managing Director for Ally Bank
“Most of these price increases are temporary, so consider carefully whether it is worth diving into your savings and paying a premium,” said Anand Talwar, manager of deposit and consumer strategy at Ally Bank.
“Instead, wait for inventories to rebuild and prices to fall,” he advised.
If you need to buy something that suddenly costs more, the additional savings protect you from relying on credit cards or other types of high-yield debt.
“If the pandemic has taught us anything, it is that your emergency fund is not good to have, it is necessary,” Talwar said.
To get there, consider setting up an automatic deposit to your Rainy Day fund, advised Talwar.
“You will build and maintain your financial freedom and prevent last year’s hard-won savings from coming out the re-opening door.”
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