ICYMI #4 → Cruises Are Slashing Prices; Energy Costs Continue to Soar; and the Lipstick Index Returns

Welcome back for another edition of ICYMI: A weekly-ish roundup of finance-related news that matters for you and your money.

🚢 Set sail for less than $30 a day

In our last edition of ICYMI, we gave you a heads up on when to book your holiday travel for the best deals. If a plane ticket is outside the budget this year, consider hopping aboard a cruise. Many cruise lines are still trying to recover from the massive hit they took during the pandemic. According to Travel Pulse, Carnival Cruise Line only had 84 percent occupancy during June, July and August. That means they’re working hard to fill up their ships for the holiday season. The Points Guy is touting info about cruises for below $30 a day. If traveling is on your wishlist this holiday season, it may be worth looking into a cruise. 

Pro tip: Consider trading in presents for an experience this year. With cruise prices at record lows, you could chip in with friends and family to share the experience of a lifetime. Plus, according to our Chief Science Officer, Dr. Elizabeth Dunn, “happiness research shows that material things turn out to provide less happiness than experiential purchases.” A cruise with those you love could be a less expensive – but more valuable – option. 

💵 Inflation isn’t letting anyone rain on its pricey parade

In edition 1 of ICYMI, we broke down the Consumer Confidence Index which is also known as CCI. Now, let’s talk about the Consumer Price Index which is also known as CPI. The CPI is, “a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.” In other words, CPI is a rundown of how much things are costing you from the grocery store to the gas pump.

The CPI since last September is up 8.2% – that means it’s eight percent more expensive to head to the self check-out lane than it was this time last year. To put that into perspective, the Federal Reserve, “seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run.” That comparison means the economy is currently at 4 times the amount of inflation that the Fed would like to see. 

Pro tip: From paying off expensive credit card debt to shopping smart this holiday season to finding ways to fuel up on the cheap, have a game plan for your money and control the variables that you can. Since we can’t predict when (or if) inflation will take a break or if a recession is looming, try to get ahead of your spending, saving, and debt as much as you can. Follow us on Instagram or TikTok, as we’re always sharing content to help you make the most of your money. 

🔌 Turn off the lights!

We’ve all been there. Every household usually has one – the lights (or thermostat) monitor. But we have to agree with them this time around. According to the latest Consumer Price Index (CPI), energy prices – which includes gasoline, fuel oil, and electricity – is up 19.8% for the 12 months ending in September. As an example, that means that an electric bill of $200 last year could now cost you $239.60. 

Pro tip: Be energy aware. Whether it’s turning off the lights, ticking the thermostat up or down a few degrees, or cutting out unnecessary miles in the car, find ways to save on energy – because you can’t control the cost but can control (some) of the usage.

💄 Welcome to the world of beauty indexes

The term “Lipstick Index” was coined during the 2001 recession by Leonard Lauder, then the chairman of Estee Lauder Companies. According to the Washington Post, “he noted that lipstick sales rose in the autumn of that year, indicating that women facing an uncertain economic environment turn to beauty products as an affordable treat.” Since then we’ve had a Foundation Index, a Moisturizer Index, and a new Fragrance Index is on the rise according to Sue Nabi, Coty Inc. Chief Executive Officer, as she recently told investors. Whether it’s a pick-me-up feeling during a lockdown or a small splurge when the world seems chaotically expensive, these little purchases of joy can be a bigger indicator of the economy.

Pro tip: Buying for happiness is important. But make sure that happiness splurges don’t turn into impulse buys that send your budget into a tailspin. Budget ahead for things that will give you a boost of joy amidst an otherwise uncertain economy. 

📔 Beige is the color of money (kind of)

If you’re not familiar with the Beige Book, it’s a report published by the Federal Reserve (also known as the Fed) eight times per year. It includes anecdotal information on current economic conditions across the twelve federal districts. The latest Beige Book was released on October 19. Here’s a few quick hits from the 32-page report: 

• Retail spending was relatively flat, reflecting lower discretionary spending, and auto dealers noted sustained sluggishness in sales stemming from limited inventories, high vehicle prices, and rising interest rates. 
• Travel and tourist activity rose strongly, boosted by continued strength in leisure activity and a pickup in business travel. 
• Rising mortgage rates and elevated house prices further weakened single-family starts and sales, but helped buoy apartment leasing and rents, which generally remained high.

Pro tip: Checking out publications like the Beige Book can give you a sense of the larger economy, plus it breaks down how things are impacted in your specific district too. Based on what we’re reading, people continue to have less extra money to spend on wants (vs. needs), and cars and houses are still hard to come by – due to limited availability and very high costs to borrow money (a.k.a. getting a loan). If rising interest rates on credit cards are impacting your spending ability, check out The Payoff Loan® to see if it’s right for you. 

Data featured as of October 24, 2022