As a long summer here in Austin, Texas turns into the blissful relief of cool autumn nights, it seems like an obvious statement at first to say that weather has an effect on my bottom line. A record number of days over 100°F left us with electricity bills that could make anyone break out in a sweat. In contrast, where I grew up, I remember my family struggling to pay the heating bills during some hard winters. We can all see how the changing of seasons affects us, and many of us have lived through catastrophic weather of one kind or another, from hurricanes to wildfires.
It can be harder to see weather’s more subtle effects on us, either locally or around the globe. Here are three ways that weather is affecting our lives and our bottom line:
Food Prices Depend on Global Weather
Modern diets depend on food imported from all over. While weather may be placid where you live, conditions far away can have a measurable effect on prices or availability. A bad freeze in Mexico last winter depleted the supply of staples such as tomatoes in places like Portland.
According to The Economist, even the beloved hamburger might not be safe from rising prices due to a record-breaking drought in Texas that has forced many ranchers to sell off their cattle.
Hurricanes, Tsunamis, and Gas Prices
When severe weather threatens us locally, shortages are not uncommon as people stock up on everything from rubber sheeting to toaster pastries. When we see disasters on the news, we reach for our checkbooks and give generously, but those same disasters might affect how much we have to give. As MSNBC reported in 2008, gas prices rose and fell based on minute shifts in the path of Hurricane Ike. More recently, the disastrous Japanese tsunami left tech firms scrambling to make expensive changes in their supply chains.
Cold Weather and Health Care Costs
Although the end of summer brings relief from high temperatures, it also brings a rise in heating costs. Perhaps surprisingly, our health care costs rise in the winter, too. According to a recent survey conducted by Walgreens Pharmacies, a total of 100 million workdays are lost in the average flu season. In addition to the costs borne by the national economy, our personal wallets can take big hits:
Taking into account missed work days, all or parts of vacations, childcare costs, doctor visits and other related costs, nearly one-third of respondents spent between $251 and $1,000 on treating the flu last season.
Protip: get your flu shot early–well before the typical December peak of flu season–so that your body has a chance to develop the necessary antibodies.
Climate Change and the Economy
The effect of weather on our lives and our economic reality may even grow more severe with time. An August entry in The Economist’s Newsbook blamed worldwide changes in weather to shifts in the jet stream caused by a warming planet. If weather continues to grow more severe and unpredictable, we may all learn more about how it affects our finances, with rising prices or unexpected shortages appearing in areas we can only guess at now. Much of the modern socially responsible investing movement was born from a desire to see a return on the investment of our hard-earned dollars, of course, and also a healthy world in which to enjoy the fruits of our labor.
How an Emergency Fund Can Help
It can help to buffer yourself against price increases by starting and maintaining an emergency fund. This is money that you set aside to cover unexpected costs, and that you replenish if you ever dip into it. If you’re unlucky enough to catch an expensive flu or find yourself with a string of surprisingly high heating bills, it can offer priceless peace of mind. Simple makes it painless to build and maintain a financial cushion by giving every customer an Emergency Fund Goal that gets automatically replenished when funds are available. It’s impossible to predict the future, but it’s nice to be prepared for it.