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Do I Really Need That?

Even though economists say consumer prices have fallen slightly, I don’t think the consumer sees that.  In fact, I think everything has gotten a lot more expensive for many people even if the actual dollars and cents for an item haven’t changed a bit.  That’s because price consists of more than just the $xx.xx, and those other variables are driving up the “price.”  Here are some I’ve thought of:

1. Many shoppers have less disposable income – even without a loss in salary, for many taxes are way up – so as a share of their entertainment budget, that DVD costs a lot more now.

2. There are many free or low cost resources that are available and promoted – maybe more than a year ago, such as free movie screenings at the mall, and it is probably more socially appropriate to use those now than pre-recession.

3. Shoppers have more guilt around spending – so the psychic “price” has gone up (”Do I really need to spend money on THIS?”)

4. There’s a shift in what it means to be savvy – everyone wants to feel competent and spending on things that would have been seen as enviable in the 80’s (that Rolex) are seen as foolhardy today – so again, the cost of many things, particularly those related to entertainment or self-indulgence, have just gone up.

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