Move Over Cratchet-Costs Are Up, Income is Flat, Ho Ho NO — Dave’s Diary

While the scramble is on for many of us to find the perfect present for Christmas, among the candy canes, reindeer and dancing elves is always a story about the family that is just barely getting by and can’t afford to buy anything for Christmas.

The truth is the cost of living is up, and it means Americans have to make spending cuts on non-essentials. Translate- a tougher Christmas for many!

Santa may be myth but higher prices are a reality.  Fourteen thousand households kept diaries on their spending for two weeks, and it revealed that some Americans are spending 40 percent more on health insurance than they did six years ago. Other data shows that between 2007 and 2013, middleclass spending rose about 2.3 percent, but at the same time, income raised less than half a percent.

All of this means families are spending less on furniture, entertainment, clothing and even child care. Economist Steven Fazzari says, “Part of the story is that your income growth is slowing. They’re spending more on necessities, cutting back on other types.” Also notable: since 2007 the cost of mobile-phone service has risen nearly 50 percent. (Yahoo)

If ever we needed a boost from Santa it’s now.