People who are trying to avoid price increases by buying nothing

The US saw its prices rise by 7% last year, the largest annual increase in almost four decades. The US consumer, whose spending power is the largest in the world, is starting to feel tired.

People who are trying to avoid price increases by buying nothing

Sevan Tavoukdjian states, "I'm now finding that I'm constantly tracking certain items' costs." It has changed the items I buy.

Actor, 34, moved into his apartment in New York City last month. He was shocked to see how much it would cost for furniture.

He decided to scrap his plans to purchase furniture and instead sent an email to the "Buy Nothing” Facebook group in his neighborhood, where people can offer their unwanted items free of charge.

He says, "I thought, ‘I’m going to be broke just buying the basics’." "I would love to have a new couch but the prices are so high that it's impossible for me to afford one."
According to research by the University of Pennsylvania Wharton School, the average American family spent $3,500 (PS2,600 more) last year than it did in 2020 to purchase the same goods or services.

Housing costs rose 4.2%, grocery bill prices jumped 6.3%, and clothing prices rose 5.8%. The biggest rises were in living and dining furniture, which rose more than 17% as Mr Tavoukdjian wanted.

However, salaries have not kept pace with inflation, forcing people to avoid purchases, find cheaper alternatives or, like Sevan, hunt for free things.

This situation has led to a surge of activity on neighbourhood exchanges like the Buy Nothing Project, which Mr Tavoukdjian used when he needed to furnish his apartment. It is a growth trend that began with the pandemic.

The number of members has increased more than twice in the last two years, to more than 5 million worldwide. To meet demand, the group recently launched an app.

Freecycle is a similar site, where users typically post about 20,000 items every day. Deron Beal, founder of Freecycle says that the increase in posts per day has been driven by financial concerns.

He says that people are buying petrol and going to the stores to see high prices. They want to save a bit of money and Freecycle...is a good option.

Tania Brown, a Georgia-based financial planner with over 20 years of experience, said that even families with higher incomes are reconsidering how they spend their money.

She says, "There is a general sense of anxiety about inflation: How long will this last? What impact is it going to have on their daily lives?" "I'm definitely hearing changes and differences."

According to Kathy Bostjancic (chief US financial economist at Oxford Economics), the squeeze caused a dip in consumer spending in December. This deceleration is likely to continue.

Her firm anticipates that consumer spending will grow by around 3.5% in 2013. This is still strong but a significant slowdown from the 8% increase last year.

She says that consumers have made alternative choices, whether it's to not buy at all or to find a second-hand sofa.

According to economist Zheli He who was part of the University of Pennsylvania's research, it is difficult to predict when households will receive some relief from falling prices due to the many factors that are driving inflation, such as supply chain hold-ups and labour shortages.

She says that despite the dramatic price increases, purchases of hard-to-substitute goods like petrol have continued to rise.

She says, "People have to spend on these [hard-to-swap goods] so the higher prices will only drive up their cost-of-living."

Tavoukdjian, an adjunct literature professor who has had to cut his teaching hours, said he was amazed at the variety of items offered in his local Buy Nothing group. These range from new plates and pillows to gently used clothes and toys for children, and even more unusual items like breast milk.

His plea for help was answered. He transformed his New York City studio from bare bones into a home in just days. He added five chairs, two small tables and two lamps to the space.

However, the shock at the initial price of his search has lingered.

He didn't reach for his wallet to buy a new vacuum cleaner when his old one broke. For help, he went to Buy Nothing.

He says, "They've made an enormous difference." It's amazing the possibilities."

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