“Mommy, Why are you buying our food at Walmart?”
…”Daddy, Why are we not eating my favorite fancy meals and brands of food?”
It is not quite Chef Boyardee and Ramen Noodles yet, but there is data reporting higher-end households shopping at lower-priced food stores (i.e. Walmart).* There is a lesson for kids and adults here. First a few more details.
Inflation is no joke; and can be the great equalizer. For even the highest-earning households, nearly everything is more expensive. Namely, food. In addition, during the pandemic households became accustomed to ordering out for food and meals, taking delivery, and cooking at home less. For those households who chose to cook at home more often, the ingredients were and are now often delivered or shopped for by a “shopper” and picked up curbside at the grocery store or delivered to the doorstep. Food and service costs have skyrocketed (partly the result of further increases in wages for basic hourly workers).
It may sound extreme, but higher-income households who shop often at Nordstom, Macy’s, or even Home Depot are shopping at those stores less and focusing on the basics. These shoppers are giving priority to food and essentials, with Walmart seeing huge gains in grocery – specifically from the higher-income household segment.*
The lessons are several (and beyond this list).
- For starters, inflation changes behaviors of ALL income levels. The smartest and most observant adults and children pick up on (or will pick up on) the reality that higher costs mean less money left over for “fun” and “splurge” items. (Even the fact that an adult or child can define “splurge item” is a win.)
- At the earliest possible age or time, knowing when to cut back on pricier, more discretionary “treat” items or to reapportion spending around essentials can make or break present and future financial stability. Remember: these changes or cutbacks need not be permanent!
- Not to beat the “emergency fund” drum, but emergency funds are meant for exactly the inflation cycle where we find ourselves today. Having an emergency fund or “rainy day fund” (inflation today may be more like a hurricane) could make possible that future vacation or splurge item when the times calm down.
Awareness and being “real” about current inflation and overall costs are key. Also, key is realizing that no one is perfect, and no decision is perfect. Timing and luck (both good and bad) are factors when it comes to major purchases and “splurge” items. Inflation seems not to be going away anytime soon, so no better time than the present to take a closer look at overall spending and also teach kids – and adults – about the beauty of simplifying, even if for a period of time.
*Nassauer, Sarah, “Walmart, Home Depot Give Cautious Outlook as Shoppers Spend More on Basics”. WSJ.com.