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My Personal Inflation Rate
Old 05-24-2010, 01:01 PM   #1
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My Personal Inflation Rate

I recently decided to take another look at my personal inflation rate. Using Quicken, I was able to compare my fixed costs in 2009 to my fixed costs in 2005. I used 2005 as the reference year because before then we lived in a different house (and different state) and the comparison would have been harder to make. In order to avoid muddling the apple-to-apple comparison, I also ignored auto and home repair costs, as those can vary widely from year to year.

Overall my fixed costs increased by a cumulative 2.4% from 2005 to 2009 (the CPI was up about 13+% during that time frame if my internet source is correct).

Auto costs: decreased about 3%. Our car insurance premiums went down despite higher liability limits and, since 2008, we have tried to use our cars more deliberately (lower gas consumption).

Groceries (food, toiletries, household cleaners, paper products, wine and liquors): increased by almost 64%. Not all of this is food inflation though. In 2005 we bought half of our groceries at Walmart and half at the local supermarket. In 2009, we bought only 10% of our groceries at Walmart, 50% at the local supermarket and 40% at Whole Foods. Also, we drank a lot more wine in 2009 than we did in 2005.

Home: Mortgage interests went down due to normal loan amortization. But property taxes and insurance went up about 10%.

Medical: up 14%. Ah, the joy of getting older... Means more visits to the doctor, dentist, and drugstore. Copayment rates increased slightly between 2005 and 2009.

Pets: up 53%. But we now have 2 pets instead of only one, so not all of this is inflation.

Utilities: down about 20%. Cable TV/internet is down (despite having more premium TV channels and faster internet) because we shop around for better deals all the time. Telephone is down (thanks to Skype) despite having upgraded our cell phones to iPhones. Water and Electric is down despite higher rates: more efficient use of energy (CFL light bulbs, improved energy efficiency of home and appliances, and a more deliberate approach to energy conservation).

Not saying my experience is typical. I just wanted to share with the group. Feel free to share your experience.

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Old 05-24-2010, 08:40 PM   #2
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Interesting. Assuming you have the same car(s) you did in 2005, I would imagine the reason insurance went down is because they've depreciated and are worth less, and the insurance company bases rates on their current value?

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Old 05-24-2010, 09:01 PM   #3
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In 2009, we had indeed the same cars as in 2005. However, we replaced both cars with two new cars in early 2010 (equivalent models) and the insurance premiums only went up $15 a month or so (actually, part of that increase can be attributed to an increase in liability limits). So our insurance premiums are still lower than they were in 2005 despite the increased coverage (in 2005, our cars were 4 and 8 years old). Due to the fact that the cars are newer, I expect the auto taxes to go up a bit while the better fuel efficiency might save use some money at the pump. We will see how it all plays out.
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