Yahoo Finance Americans' Feelings About The Cost Of Groceries Are 'Very Inaccurate,' Ramit Sethi Says
With all the fluctuations in inflation over the past few years, it's no surprise that people complain about grocery costs. However, Netflix personality and self-help author Ramit Sethi says, "The feelings about grocery costs, while they may be real feelings, are very, very inaccurate."
In an interview with Politico’s Head of News, Alexander Burns, Burns mentioned that as a political journalist, he hears many voters complain about how much items cost in the grocery store; however, political campaigns rarely focus on this issue.
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"I have a rule, which is, never trust someone's self-report about grocery costs," Sethi responds. "And I know this because I've spoken to thousands, actually tens of thousands, of people. And they will often say: ‘Inflation is crazy, it's impossible to afford groceries anymore.' And I'll say, ‘Is that right?'"
Sethi said people will tell him they're paying three times what they paid three years ago buying the same items. "And as we dig into it, of course, people don't track how much they actually spent," Sethi states.
It seems that many people, when observing the cost of groceries, don't bear in mind other changes that have taken place in their personal lives over time that could also contribute to changes in their purchasing habits. Sethi told Politico, "They'll say, ‘No, I'm buying exactly the same items. Apples to apples. [I'll ask], ‘Hey, how old are your kids?' ‘Oh, well they're six now ...' Well, when kids get older, they eat more. Families change."
Indeed, according to the USDA, U.S. food-at-home prices increased by 5% from 2022 to 2023, and the U.S. Bureau of Labor Statistics reported that from 2021 to 2022, food-at-home prices had increased by 10.8%. While that might seem significant, it's nowhere near the triple, or even double, the costs consumers claim they are spending on groceries.
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Sethi argues that people's perceptions are often skewed by their failure to accurately track their spending and by the psychological impact of media coverage. "Just as we see in personal finance, it’s very difficult for us to properly amortize one-time costs across 10 or 20 years. It’s the same thing with grocery costs. They’re super salient in our minds because we go to the grocery store multiple times a week. And, more importantly, we hear the press talking about it all day long. ‘Grocery costs are out of control.’ But when I challenge my listeners and readers, ‘Show me the actual numbers’ — they can almost never produce them."
It's undeniable that inflation affects grocery prices, but the extent is often misunderstood. Sethi emphasizes that individual perceptions often exaggerate the actual financial burden. To gain a clearer understanding of personal finances, it's crucial to track expenses accurately and consider all contributing factors. For those struggling to navigate these complexities, consulting a financial advisor can provide tailored advice and strategies to manage grocery expenses and broader financial goals effectively.
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