Yahoo Finance These Were the Top Unexpected Expenses for Americans in 2023
You can’t go anywhere without hearing how much more expensive things have become. While some expenses have been expected, there are various surging costs that have surprised Americans. We can’t ignore how pricey some basic items have become in recent years.
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A GOBankingRates survey asked Americans what their top unexpected expenses for 2023 were — here’s a look at them and what we can expect.
The Top Unexpected Expenses for Americans in 2023
The survey found that food prices were the largest unexpected expense of 2023 for Americans.
What were the biggest unexpected expenses Americans had in 2023?
Food prices: 34%
Gas/Transportation prices: 26%
Housing prices: 12%
Utility prices: 11%
I have not had any unexpected expenses: 17%
Here are some key highlights from the results:
About 19% of people between 18 and 24 listed food prices as an unexpected expense, reaching almost 40% for those 65 and over.
Only 7% of those over 55 were surprised by housing prices.
44% of those between 18 and 24 listed transportation prices as higher than expected.
20% of those in the 65 and older age group didn’t have any unexpected expenses.
Men and women were very close on every unexpected expense with no noticeable differences.
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Why Were These Expenses Unexpected?
What made these unexpected expenses so high for Americans in 2023? We will explore some possible reasons.
Food Prices
“According to the U.S. BLS Consumer Price Index, prices overall were up 3.1% last year,” said Todd Stearn, founder and CEO of The Money Manual. “But how this played out on an individual basis was largely dependent on your diet.”
With food prices increasing by 2.6% in 2023 on top of the increases from previous years, many have felt the pinch when buying food. With take-out food increasing 5.1% over the year, people have likely noticed the differences when dining out.
“It makes sense that anyone who had to reevaluate their dietary choices to make their grocery bill affordable would’ve seen 2023 food prices as quite jarring,” Stearn said.
It’s also worth noting that groceries are an expense we face all the time. You instantly feel the impact of the bill when you buy groceries or go out for dinner. If there’s a price increase, you’ll spot the difference at the moment. Many Americans may have been surprised at a restaurant or grocery store that they frequently visit, raising prices in between visits during the year.
Many Americans also likely noticed their grocery costs increased in 2022, and they felt the burn more in 2023 when other expenses also increased. The combination of all prices going up can be felt more in your grocery bill since this is likely where you spend the leftover money after paying your other basic living expenses.
Gas/Transportation Prices
“According to the U.S. Energy Information Administration (EIA), average gas prices were actually $0.43 per gallon lower in 2023 than in 2022, and prices were also more stable throughout the year,” Stearn said. “That’s largely because gas prices peaked at a shocking $5.01 per gallon in June 2022 after Russia invaded Ukraine.”
With average monthly payments on new vehicles hitting $739 recently, many Americans are likely struggling with transportation costs. The combination of expensive gas and interest rate hikes that lead to higher car payments has turned fuel and getting around into a larger expense than usual.
Here are some other possible reasons why gas/transportation prices were one of the top expected expenses:
People started traveling more again.
People finally purchased a new vehicle after facing availability concerns.
The impact of other expenses is felt most when you’re driving and trying to get around.
Expenses That Weren’t Unexpected
With food prices being the largest unexpected expense for Americans in 2023, it’s worth examining why other expenses weren’t listed.
1. Many Expenses Are Automated
“Meanwhile, according to a PYMNTS survey of almost 3,000 U.S. consumers, nearly 40% pay their bills via automatic payment,” Stearn noted. “It’s not unreasonable to assume that many are doing that because they lack the time to stay on top of these bills and therefore may not be paying close attention to price hikes on things like Internet, phone, cable, insurance and other bills they have on autopay.”
If you automate other expenses, you may not notice the subtle price increases. Groceries and gas are common purchases you likely have scheduled into your routine. It’s likely that you’ll notice any slight price movements.
2. Housing Prices Weren’t Considered
Notably, only 12% of the participants listed housing prices as an unexpected expense because it’s likely that people have realized that these costs have risen in recent years.
It’s also possible that many people weren’t in the market for a new home in 2023, so they didn’t notice the higher prices. Someone would more likely notice the grocery prices going up as it’s something that they think about often.
What Can We Expect in 2024?
If you’ve been following the news, you may have heard that the Federal Reserve has been monitoring prices and economic data to determine how to proceed with interest rate decisions.
Gas/Transportation Prices
Gas prices could drop for the second straight year, according to GasBuddy. While we can’t predict global issues impacting the supply of oil, many experts are hopeful that gas prices won’t increase any further in 2024.
Food Prices
“The good news is that the USDA expects grocery prices to decrease by 0.4% in 2024,” Stearn said. “While that’s not a huge decrease, the fact that prices are trending in a downward direction at all is a big deal.”
Hopefully Americans will be able to adjust their budgets based on the current price hikes, and many will get back on track. If food prices drop or at least remain the same for 2024, Americans shouldn’t be surprised by this expense.
“Interestingly, the USDA also expects the cost of dining out to increase by 4.7% over the same period,” Stearn said. “Consumers looking to save may want to find ways to get more creative with their home cooking and dining experiences this year.”
As tempting as it is to dine out, many may think twice about how often they go out for food, as this expense could quickly catch up.
Closing Thoughts
With life becoming more expensive due to increased expenses, it’s essential that we adjust our budgets accordingly. Hopefully, prices will stabilize and people won’t have to stress about further inflation hurting their purchasing in 2024.
Methodology: GOBankingRates surveyed 1,021 Americans aged 18 and older from across the country between October 12 and October 16, 2023, asking twenty-three different questions: (1) How much did you spend on your pet in the last year?; (2) How much have you spent/are you planning to spend on Halloween this year?; (3) How much money do you spend on kid-related activities in a year?; (4) How much do you spend on average on your monthly utility bills (electric, heat/gas, water)?; (5) What spending/saving habits have you had to change in the last year due to inflation/rising prices? (select all that apply); (6) What was the biggest unexpected expense you had this year?; (7) How much do you currently spend on monthly car payments?; (8) Do you live in a single-income or dual-income household?; (9) In the past year, did you have to take on a side gig because of rising prices/inflation?; (10) How much do you bring home from your side job(s) each month?; (11) How much have your overall expenses gone up in the past year?; (12) What is your top financial priorities to end 2023?; (13) What is the top way you’ve earned your money/gained wealth?; (14) Have you started financially preparing for 2024?; (15) How much have you spent on home upgrades in 2023?; (16) How will the resumption of student loan repayments affect your budget?; (17) How much do you currently owe in student loans?; (18) How much do you spend on yourself (not including housing, food, etc.) out of each paycheck?; (19) How much do you spend on online purchases per month?; (20) Where do you shop for groceries most often?; (21) Do you shop around for groceries to get better deals?; (22) What are you currently invested in? (Select all that apply); and (23) What is the current value of your stock investments?. GOBankingRates used PureSpectrum’s survey platform to conduct the poll.
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This article originally appeared on GOBankingRates.com: These Were the Top Unexpected Expenses for Americans in 2023
