This is something that many people want to know.
- Inflation has driven up the cost of living in 2022, and that extends to clothing.
- There is reason to believe that consumers will be relieved in the new year.
- As interest rates rise, consumer spending is expected to slow and demand to decline, which could lead to lower clothing prices.
There are certain expenses that consumers face that are non-negotiable – meaning we have no choice but to whip our credit cards if need be to pay for them. Food is one, for example, and gas is another (if you can’t leave the house and move around, you can’t work or buy essentials for your household).
It’s easy to argue that clothes also fall into the category of “essential expenses.” Admittedly, some clothing purchases can be considered extras. But as your kids grow, you need to buy clothes that fit them – there’s no getting around it. And if you need to maintain a professional wardrobe to keep your job, you may need to shop for clothes occasionally as the items you own succumb to wear and tear.
Meanwhile, clothes have been expensive this year due to general inflation. And you may be wondering what the trend will be in the new year. The good news is that you could be relieved when it comes to not only the cost of clothing, but also that of consumer goods in general.
Prices could fall in 2023
Various factors have led to runaway inflation in 2022. On the one hand, supply chain shortages continue to be an issue, and whenever there is not enough supply of a product for everyone, its price is likely to increase.
But chances are we won’t see such an abundance of demand relative to supply in 2023. The Federal Reserve has been aggressively raising interest rates to slow consumer spending. So the cost of borrowing, whether it’s a car loan, a mortgage or a personal loan, is now higher and could continue to rise.
This is likely to push consumers to reduce their spending. And once we narrow the gap between supply and demand, the cost of goods as a whole should start to come down. This extends to clothing.
In fact, Morningstar estimates that inflation will be worse in 2022 than in 2023 and predicts that consumers will get some relief next year. It is certainly a positive projection.
How to save on clothes
Regardless of how clothing prices trend in the new year, there are steps you can take to keep your costs down. First, avoid expensive brands, especially when it comes to children’s clothing. Kids tend to outgrow clothes quickly, so there’s no sense investing in a $40 sweatshirt when you can buy one for $15 instead.
Also buy clothes at the end of the season rather than at the beginning. Rather than buying winter coats in October, for example, wait until April, when retailers have excess stock they’re looking to get rid of. This is when you are likely to find deep discounts, and at this time you can purchase the next size up in anticipation that your children will need a larger size for the following season. .
Finally, don’t be too proud to accept second-hand items. If you have friends in town with older kids, ask them to pass on some gently used clothes to your kids. It’s an easy way to save on clothes, and you might be doing your friends a favor by helping them declutter their closets.
There are reasons to believe that clothing costs will be cheaper in the new year. But either way, do what you can to keep your costs down so you can free up money for other essential expenses.
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