Is my money losing its meaning?

What is money, and what does it mean to you? This was one of the first questions I explored on this blog, but my recent post on inflation and my visits yesterday (and again today!) to The British Museum made me consider the issue again.

There, the museum’s Money exhibit asks ‘What does ‘money’ mean to you?’:

‘Our use of the word ‘money’ is changing. It is increasingly being used to indicate a particular quality or attribute’. For example, a ‘money quote’ is the part of a speech that will be most heavily reported.

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One of the key pieces of the exhibit is an artwork entitled ‘Trillion dollar poster’, made from next-to-worthless bank notes at the height of Zimbabwe’s hyperinflation.

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Hyperinflation, where extremely rapid, out of control inflation occurs, ‘is a situation where the price increases are so out of control that the concept of inflation is meaningless’, and, when caused by a significant increase in the money supply not supported by actual growth, ‘the currency loses its value’ or meaning.

In Linguistics, changes in meaning over time are known as ‘semantic changes‘. One type of semantic change is called ‘semantic weakening‘, and involves the reduction or loss of strength of the meaning associated with a word. In effect, the meaning of the word is devalued.

Take the word ‘fine‘ for instance. The word originally meant ‘free of impurities’ and ‘of high quality’, ‘perfected’. But when we respond today ‘I’m fine’, we certainly don’t mean that we are having a perfect day. As an adjective, ‘fine’ ranges in meaning ‘from something exquisite to something merely acceptable‘.

Likewise, a currency can become more or less valuable over time. While hyperinflation is an extreme occurrence, some degree of inflation is normal in most economies.

A couple of years ago, I decided to examine how much the cost of living has increased, and watched a bunch of old ads on YouTube (1970s-2000s) for Coles, Bi-Lo, Safeway, Woolworths, Dick Smith, KMart and Target.

I composed a list of 100 items, and then compared the prices to those when I went to the shop.
Surprisingly, quite a few items were cheaper in the 2010s than they were 10, 20, or 30+ years ago. And bear in mind, this is a comparison of the old sale prices that were advertised on TV with the prices on shelf in store when I went to check – some of which were on special, most of which weren’t – so in many cases, the savings are even more substantial, as the regular price would have been even higher.

Items that are cheaper now:

  • Acrylic wineglasses – 99c each in 1986, only 75c in 2012.
  • Calculators – $3.95 each in 1991, only $3.49 in 2012.
  • Clothing: sweatpants – $8.98 to $9.99 between 1977 and 1987, only $8 in 2012.
  • Clothing: kids sweatshirt – $7.99 in 1987, only $6 in 2012.
  • Clothing: printed sweatshirt – $14.99 in 1987, only $5 in 2012.
  • Coca-Cola 2L – $1.50 in 1988, only $1.49 in 2012.
  • Clock radio – $26.99 in 1980, only $17.99 in 2012.
  • Computer – $1,995 in 1991 (with a 40Mb HDD), only $399 in 2012 (with a 320Gb HDD).
  • Corned silverside – $7.49 a kg in 1984, $7.59 in 1987, only $5.99 in 2012.
  • Icecream, Peter’s – $4.68 for 2L in 1987, only $2.15 in 2012.
  • Juice, Berri – $1.20 per liter in 1984, $1.32 in 1985, $1.43 in 1990, only $1.25 in 2012 (bottles have increased in size since the 80s)
  • Light timer – $19 in 1983, only $14 in 2012.
  • Laundry powder, Fab – $3.99 for 1.5kg in 1986, $6.98 in 1998, now $3 – but is 2x power, so really $1.50 in 2012.
  • Margarine – $1.50 in 1985-1998, only $1.40 in 2012.
  • Nutrigrain – 62c per 100g in 1988, only 62c per 100g in 2012.
  • Phone – $179 for cordless and $199 for one with answering machine in 1991, only $19 in 2012.
  • Powerboard with 4-plugs – $7.95 in 1991, only $4.99 in 2012.
  • Prawns, Australian Tiger – $26.99 a kg in 2000, only $22.99 in 2012.
  • Quilt filler – $14 in 1988, only $8 in 2012.
  • Pillow – $5.98 in 1987, only $3 in 2012.
  • Sheets, single – $14.99 in 1980, $20 in 1988, only $10 in 2012.
  • Soup, Continental Chicken Noodle – $1.86 a pack in 1986, only 99c a pack in 2012.
  • Toilet paper, Value Pack – $1.95 for 4 rolls, only $1.92 in 2012.
  • Towel – $10 in 1987, only $8 in 2012.

Other items are a bit more expensive now, but if you switch brands, you can still beat the old advertised prices (as Mr Money Mustache says, you can make more frugal choices to beat CPI increases – and of course, many of the items on this list are luxuries which do not need to be purchased at all):

Items that are more expensive now:

(but can be frugally hacked!)

  • Arnotts biscuits – $1 a pack in 1987, $1.99 now – but if you buy homebrand, only 95c in 2012.
  • Coca-Cola 1.25L – 89c in 1986, $1.40 now – but if you buy homebrand, only 79c in 2012.
  • Coca-Cola per can in 6 pack – 52c in 1987, $1.27 now – but if you buy homebrand, only 40c in 2012.
  • Coffee, International Roast – $1.78 per 100g in 1984, and $2.37 in 1985, $3.59 now – but if you buy homebrand, only $1.70 in 2012.
  • Coffee, Nescafe – $2.19 per 100g in 1980, $3.29 in 1987, and $4.46 in 2000, $5.68 now – but if you buy homebrand, only $1.99 in 2012.
  • Juice boxes, Just Juice – $2.00 for a 6 pk in 1980, $4.39 now – but if you buy homebrand, only $1.99 in 2012.
  • Laundry liquid, Dynamo – $6.82 for 2L in 1987, now $9.99 – but if you buy homebrand, only $1.49 in 2012.
  • Laundry powder, Omo – $3.92 for 1kg in 1986, now $9 – but is 2x power, so really $4.50 in 2012 – but if you buy homebrand, only $1.85.
  • Lemonade, Schweppes – 79c for 1L in 1985, and 75c in 1986, now $1 – but if you buy homebrand, only 57c per liter (1.5L bottle)
  • Middle bacon – $7.29 a kg in 1986, now $7.99 – but if you buy homebrand shoulder bacon, only $5.49 in 2012.
  • Nappies – $15.99 a pack in 1991, only $13.99 a pack in 2012 – $9.99 if you buy homebrand.
  • Pasta, San Remo – $1 in 1988, now $2.55 – but if you buy homebrand, only 69c in 2012.
  • Pizza, McCains – $4.69 each in 1990, now $4.90 – but if you buy homebrand, only $3 in 2012.
  • Soup, Heinz – $1.17 a can in 1991, now $1.84 – but if you buy homebrand, only 89c in 2012.
  • Sunsilk shampoo/conditioner – $1.50 per 100ml in 1986, only $1.25 in 2012 – 30c if you buy homebrand.
  • Ty-nee tips tea – $1.59 per 200g in 1986, now $1.89 – but if you buy homebrand, only $1.38 in 2012.
  • Turkey, Steggles frozen 1kg – $14.99 in 2000, now $21.70 – but if you buy homebrand, only $3.45 per kg.
  • Uncle Toby’s Museli Bars – $1.50 per 6 bars in 1986, $1.72 in 1987, now $3.99 – but if you buy homebrand, only $1.40 per 6.

Of course, there are quite a few items that are, as would be expected, more expensive than they used to be, but overall:

Excluding the computer, purchasing the other 99 items advertised over the 70s, 80s, or 90s would cost $197 less today.

If you substitute homebrand items where available, you could slash your bill by $280.

Things (at least on this list) actually cost 0.23x LESS than they did 20-30 years before.

So while inflation certainly occurs, and is more visible in some areas than others (e.g. housing, which I’ll cover next), it’s not all bad news, and you can modify your shopping behaviours to counteract some of the effects.

Another question this raises, however, is why are some of these items so cheap, compared to our substantially higher wages today? How socially ethical and environmentally responsible is their production?

34TrillionSo what does money mean to you?
And what inflation-proof goods or services can you identify?

Check out the ‘PriceRewind‘ game I made based on these lists and test your knowledge of prices.

Play with an Australian or US inflation calculator.

Today’s featured image is a $50 billion bill on display at the British Museum.

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