It’s Saturday. You want to barbecue steak for dinner and so you head to the store, ignoring the sound your car’s making.
You pick up a coffee at Starbucks and promise to take the car to the mechanic’s Monday.
Must Read
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don’t have to deal with tenants or fix freezers. Here’s how
- I’m 49 years old and have nothing saved for retirement — what should I do? Don’t panic. Here are 6 of the easiest ways you can catch up (and fast)
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s what it is and 3 simple steps to fix it ASAP
Sounds like the perfect Saturday, right? Wrong. It’s the perfect storm — of inflation.
In August, the Consumer Price Index rose 2.9% on an annual basis. But the price of some goods and services many Americans depend on have soared well beyond that. Among them:
- Coffee — up 21.7% year over year
- Steak — up 16.6% year over year
- Car repairs — up 8.5% year over year
The sticker shock is hitting home across the U.S. When it comes to coffee, concern is so universal it’s gone bipartisan, driving a Republican and Democrat lawmaker to team up on a bill to address coffee prices [1].
Whether the bill succeeds remains to be seen. But it may help to understand some of the factors driving up the cost of coffee, steak and car repairs — and how to budget accordingly.
What’s behind the price spikes
Coffee prices boil
If you’ve been too bleary-eyed in the morning to notice the rising price of joe, you may have missed the fact it’s been surging for a year.
In November 2024, the futures market drove up the cost of Arabica coffee to its highest level in nearly 50 years — at $3.26 a pound — due to fears about supply disruptions in Vietnam and Brazil [2], which has traditionally provided 30% of America’s coffee [3] and which has suffered serious drought.
Read more: US car insurance costs have surged 50% from 2020 to 2024 — this simple 2-minute check could put hundreds back in your pocket
Things came to a boil when President Donald Trump imposed tariffs on coffee products from coffee-producing nations — including Brazil (50%), Vietnam (20%), Nicaragua (18%) and Columbia (10%).
Tariffs on Brazil went into effect in August. Not surprisingly, its coffee exports to the U.S. fell 46% in August, Reuters reports [4]. As more than 99% of the coffee consumed by Americans is imported, such a plunge in supply will only drive prices higher. [5]
The situation is so dire that two bipartisan lawmakers — Reps. Don Bacon (R-Nebraska) and Ro Khanna (D-California) — have come together over coffee. As the Washington Post reports, they have teamed on a bill to exempt coffee products from Trump’s tariffs.
Cost of steak tough to swallow
We can’t grow coffee in the U.S., meaning we’re subject to the price of imported beans. But we do grow cattle. So why is the cost of steak so high?
Like Brazil, the U.S. has experienced drought in cattle-growing states, affecting herd sizes. According to NPR, the number of American beef cattle herds is at its lowest level in 75 years [6].
The U.S. Department of Agriculture (USDA) warns that production will continue to decline this year and into 2026.
But it’s not just domestic beef supply that’s down. Imports are down since Trump imposed a 76% tariff on beef from Brazil and since the USDA blocked cattle from crossing into the U.S. from Mexico to protect American herds from a flesh-eating parasite called the screwworm.
As the New York Times reports, the parasite — which can cause extensive damage to infected herds — was eradicated in the U.S. in the 1960s, but has resurged in Central America. A case was identified Sept. 21 in Mexico just 70 miles from the U.S. border [7].
"There’s healthy competition for the cattle, and there’s not enough of them to fulfill the demand,” Utah cattle rancher Brady Blackett told NPR. “And so it has driven prices to historic highs."
Pricier parts and labor on car repairs
With the pandemic in the rear-view mirror, you’d think the cost of cars — and the supply-chain mess it triggered — would be over. Well, it may be easier to buy a car today, but the cost of repairing one has jumped.
As CNN reports, Trump’s tariffs of 25% on imported auto parts (including after-market parts) are one factor.
Skyler Chadwick, director of product consulting at Cox Automotive, told CNN that drivers are also holding onto their cars longer, meaning repairs may be more significant, like replacing transmissions or engines [8].
Making matters worse, there’s a shortage of qualified auto service workers nationwide as cars become more complex — including the technology in electric vehicles.
So Americans are facing a double whammy of more expensive parts and labor in the auto shop.
How to mitigate the impact of inflation
At a time when your paycheck may not be going as far as it needs to, it’s important to prioritize your spending. The first thing you should do is review your monthly expenses and break them into two buckets: essentials and non-essentials.
The 50/30/20 rule for budgeting means allocating 50% of your income for essentials, 30% for non-essentials and 20% for savings. If your essentials are taking up more than 50% of your income, then you should be prepared to reduce the 30% on non-essentials.
But if your essentials include highly inflationary things like coffee, steak and a car, you may need to find ways to reduce your expenditures on those as well. Here are some ways to do that.
Stretch
Coffee: Obviously, making it at home is cheaper than takeout. Buy ground coffee in bulk (surprisingly, grinding it yourself is more expensive) and freeze it, which not only extends freshness but lowers acidity for a smoother taste. Cheapest way to prepare? The pour-over method [9].
Steak: Buy beef at a bulk retailer like Costco or Sam’s Club and cut into portions to use immediately or freeze. You can team up with another family or friend on this exercise. Make it stretch even further by cutting into smaller portions for tacos, stir fries or salads.
Car repairs: This is an oldie but goodie: Maintain your car to avoid repairs down the line. That means regular oil changes and checking brakes, battery and tire pressure. The AAA says car owners can tackle many of these basic maintenance items themselves [10].
Substitute
Over the years, Americans have had to get creative to save money in tough times, including finding substitutes for expensive groceries and services. This is one of the tough times when it pays to get creative.
Coffee: There are numerous coffee substitutes. Some provide energy; others replicate the flavor or ritual. For energy, consider yerba mate, matcha or black tea. For taste without caffeine, consider chicory.
Steak: Go for cheaper cuts like flank, chuck eye or skirt steak. You might even substitute another meat entirely, like pork tenderloin, or go for a vegetarian option like a grilled portobello mushroom steak.
Car repairs: If your car is a lemon or so old you’re getting dinged on every trip to the repair shop, consider selling your car and car-sharing instead. Clean Fleet Report notes that there are more car-sharing options than ever, including peer-to-peer car-sharing options like Turo along with established players like Zipcar, Car2Go and Enterprise Car Share [11].
Save
Do all you can to save cash to cover all your monthly expenses. Consider putting your money in a high-yield savings account to help with that.
If your paycheck is not keeping up with inflation, it may be time to rethink all of your spending or boost your income, whether by committing to a side hustle or looking for a job with better pay.
In the meantime, if you’re really upset about coffee prices, you may want to reach out to your local Congressman or Congresswoman to support that bipartisan coffee bill. Coffee drinkers may consider this a matter of national importance, after all.
Article sources
At Moneywise, we consider it our responsibility to produce accurate and trustworthy content people can rely on to inform their financial decisions. We rely on vetted sources such as government data, financial records and expert interviews and highlight credible third-party reporting when appropriate.
We are committed to transparency and accountability, correcting errors openly and adhering to the best practices of the journalism industry. For more details, see our editorial ethics and guidelines.
[1]. Washington Post “Lawmakers introduce bill to kill tariffs on coffee”
[2]. Financial Times “ Coffee futures hit 47-year high on global supply and EU law fears”
[3]. Coffee Intelligence “Coffee prices surge to 47-year highs, reshaping the industry”
[4]. Reuters
[5]. National Coffee Association “Coffee in the U.S.”
[6]. NPR “Why beef prices are higher than ever (and shoppers are finally resisting)”
[7]. New York Times “Screwworm case detected less than 70 miles from U.S.-Mexico border”
[8]. CNN “Car prices are in check. But get ready for sticker shock on repair bills.”
[9]. Basic Barista “Why pour over coffee is the best way to make coffee at home."
[10]. AAA “10 DIY car maintenance tasks you can do at home”
[11]. Clean Fleet Report “We’ve entered the age of shared mobility”
What to read next
- How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you’ll need a substantial stash of savings in retirement
- There’s still a 35% chance of a recession hitting the American economy this year — protect your retirement savings with these 5 essential money moves ASAP
- This tiny hot Costco item has skyrocketed 74% in price in under 2 years — but now the retail giant is restricting purchase. Here’s how to buy the coveted asset in bulk
- Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
Join 200,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.