Could small-batch booze and other “artisanal” or so called “hipster” goods have an effect on the way a country measures its citizens’ financial success? This is the question a British report is asking as economists across the pond have revised their consumer price index to reflect changing tastes among the influential late-millennial segment of buyers whose tastes are driving some of the biggest trends in everyday purchasing.
The consumer price index, or CPI, is a vital measure of economic performance – in short, it uses a government-defined “basket” of sample goods to tell us what different kinds of goods cost for the average buyer, and gives relative weights to a wide range categories – the highest weighted are generally necessities, like food and shelter. Tracking changes in the CPI can help us learn lots of valuable things, like the patterns in which we spend money, the real value of wages, and the impact of inflation on the economy at large.
British economists added items including gin, bike helmets, and non-dairy milk products to the “basket” for their CPI calculations earlier this year, reflecting the rising popularity of these lifestyle goods, described by some as “hipster,” in the market. The increases and decreases of popularity of certain goods tell us a lot about our spending patterns – most Canadians, for example, are spending more on technology purchases today than they were five years ago.
The fact that we’re spending more on high tech items, or perhaps on “hipster” goods, reflects our changing values as consumers, but it can also have an influence on the way we think about personal finance. What does your “personal CPI” look like? For most people, almost 30 percent of income is spent on housing, with a further 10 percent allotted to food and dining. Any outstanding debts create a serious unbalancing of the “weighting” of relative value we ascribe to our spending categories. If you’re looking for a way to get your finances back in balance, give us a call or visit us online today.