What will cost more—and what will cost less—in 2013

Prices to come on groceries, smartphones, college, and more.

By Rich_Maloof Jan 2, 2013 5:42PM

The chronically chaotic congress managed to avoid a "fiscal cliff" last night, though consumers are waking up to the realities of a compromised deal that may still pinch their pockets. As you calculate the family budget for 2013, analysts have begun providing insight on how everyday items and services are expected to rise or fall in price this year.

While it's tough to offset escalating costs for pricey monthly expenses like healthcare premiums (estimated to rise an average 6%), some costs are trending downward. The economy giveth, the economy taketh away. But mostly it taketh away.GOING UP: Smartphones. The devil’s handshake has long been that consumers sign multi-year contracts with carriers in exchange for good deals on phones. T-Mobile, for one, will no longer subsidize phone sales in the new year.

GOING DOWN: Streaming video and TV’s. Netflix and Amazon will see some stiff competition in Redbox, which will be offering DVD rentals and unlimited streaming at half the cost of Netflix’s $15.98 monthly plan. And you can watch those cheap flicks on a gigantic 60-inch LCD TV for less than ever before.

Related: 100 ways to save money in 2013

GOING UP: Shipping. FedEx and UPS have both announced rate increases for 2013, with the FedEx hike starting next week. Shipping costs are expected to rise by 4.5 percent to 4.9 percent over the year.

GOING DOWN: Shopping from your smartphone. The prevalence of consumers shopping through their phones this past holiday season should inspire retailers to lure more customers through mobile deals and discounts — maybe even enough to offset the increased cost of having your purchases shipped.

GOING UP: Cars. Regulations demanding greater fuel efficiency are causing automakers to drive up prices as they upgrade their engines. Prices on used cars, however, are starting to decline.

GOING DOWN: Gas prices. Oil prices are expected to drop from $100 to $70 per barrel in the new year, which will eventually translate to savings at the pump.

GOING UP: College … and beer. Cash-strapped states can’t afford to subsidize tuitions at public schools as they have in the past, and have less to offer for student aid and grants. In-state tuition is expected to increase 4.8 percent and fees to rise 3.7 percent. On a related note, beer may get more expensive as the cost of copper — used in materials for brewing beer and distilling liquor — is predicted to rise.

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GOING DOWN: eBook Pricing. It’s only a tiny bit of help in light of rising college bills, but a settlement between publishers and the Justice Department should give retailers more flexibility for lowering prices on electronic editions of their books.

GOING UP: Groceries. Last summer’s drought was tough on farmers, increasing their costs and thinning their herds. The USDA expects a 3.5 to 4 percent rise in meat, poultry, dairy and other food prices in 2013. An uptick in grain prices should send cereals and bakery products up by 2.5 to 3.5 percent.

GOING DOWN: Solar costs. More consumers are able to lower their monthly bills and tap into the economic and ecological benefits of solar power by changing the power provider used by their local gas & electric company.

Sources: Reuters (smartphones), dealnews (streaming video, beer, shopping), Marketwatch (TV’s, cars, eBooks), UPS and FedEx (shipping), Deutsche bank (oil), CollegeBoard (college), USDA (groceries), gigaom (solar)

Photo: Tomas Bercic/Getty Images

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