Inflation at its highest levels in 27 years, screams one headline. Manufacturers pass price increases along to consumers, screams another. “Consumers make changes – but will they last?” asks another recent headline.

“Experts say the new behaviors are the most dramatic and widespread that they have seen since the mid-1970s.”

I remember driving around with my dad in the early 1970s, looking for 19.9 cents regular in the days when people bought cars for size and room. Five years later, people were talking “sub-compact” and gas mileage and  I was driving around with my widowed mother and watching her wag her head as a few gallons of premium easily demolished a five spot.

I was about to graduate high school some 27 years ago, and though the closest I’d come to studying economics was listening to one teacher ask, “Don’t you think that most of inflation is just rip-offsville?”, meaning, as I understood it even then, that people socked by higher prices passed it on to their own customers, often with interest. I also understood that the price of a gallon of gas drove the price of everything else, from lettuce to college plans. Even back then I was beginning to wonder at that time how I was going to afford a lot of stuff – a car, a house – that people had been taking for granted for a long time. It was no bump in the economy, but a sea change in how much we all expected of life.

The more things change: A recent study by Nielsen Co., which tracks consumer habits, reveals that about two-thirds of consumers are cutting spending due to the bruising they take at the pump, clipping coupons, buying cheaper brands, and even using the phrase “Great Depression” to survey takers. Quite a journey from all the talk of “boom times” I’ve heard at accounting conference keynotes through the last 10 years.

Financial planners who’ve made their nut since 1980 – three decades of bumps, some big, yes, but mostly bumps – would do well to appreciate that their clients have hit another period of change and appreciate the depth of the worries their clients may now have. Worry that prices won’t come down as much as they went up, not for a gallon of gas for their delivery vans, not for a new desktop system for their office, not for the costs they’ll soon have to pass along to their own customers.

Such appreciation will be the only way to keep your clients’ faith in this new long run until boom times come again. And come again they will, about the day we all feel actual relief at $4 a gallon. Clients will learn to live with it; they’ll also remember who took their fears seriously. Take it from one who grew up in Rip-offsville.

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