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In times of high inflation and economic uncertainty, the natural inclination is to close up your wallet and wait for another day to make large purchases, even if you have the cash to spare. But in some instances, spending money in volatile times may be a smart financial move. Here’s how to think about eight major expenses this fall.
Get new furniture?
Inflation and supply shortages have plagued the furniture industry since the pandemic began, says Jennifer Litwin, author of Best Furniture Buying Tips Ever! “Slow recovery in the workforce has contributed to the delays and to the higher prices,” she adds. “Overall, home furnishings prices have gone up by 10 percent in the past year, with no turnaround in the immediate future.”
Litwin expects prices to remain elevated at least through the end of this year, and she doesn’t expect good values for furniture buyers to return until late 2023.
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Downsize your home?
The record run that home prices have seen in the past two years may be coming to an end, with June figures showing lower sales volumes and a slowdown in price increases. That said, sales prices on single-family homes were up more than 18 percent from a year earlier, according to CoreLogic. Such elevated prices could work in your favor if you are looking to downsize, says Scott Lindner, national sales director at TD Bank, because you can lock in the profits on the more expensive home you’re selling in order to offset the increased price of the smaller home you’re buying.
But the move may make less sense if you’ll have to get a mortgage for the downsized home, especially if you snagged a low fixed rate for your current mortgage. If your new rate is significantly higher, even on a smaller loan, your payments could go up, says Nick Bormann, a financial planner with Bormann Wealth Management.
Upgrade your smartphone?
The supply constraints that hit the smartphone market in the middle of last year have subsided just as inflation pushed down demand, says Nabila Popal, research director with the consulting firm IDC. That means that prices have fallen and carriers are making trade-in deals that could significantly lower the price of a new phone. “In the United States, this is a great time to buy a phone, because we are seeing offers from carriers at a level we have never seen before,” Popal says.