Personal Inflation Rates - (Not the current CPI or CPIW Rate)

[Koolau]

Because we spend our summer in a small apartment, we don't entertain. Therefore, we go out to eat as a part of our social interactions with folks. We are now (at least temporarily) ignoring Covid and partying like it's 2019! THAT return to normalcy is where we really notice inflation. Meals OUT are up at least 25% (probably more like 1/3.) YMMV

 

[gayl]

Groceries & utilities up (but then a DGD moved in)
Not only was it sticker shock but some items doubled from my last big trip a few months ago (granola bars, cereal, eggs) and in 1 store (Grocery Outlet) shelves were only 1/2 full. Had to go to Safeway. If this keeps up I'm going to save less each month (currently only about 2k month)

 

[Koolau]

Groceries & utilities up (but then a DGD moved in)
Not only was it sticker shock but some items doubled from my last big trip a few months ago (granola bars, cereal, eggs) and in 1 store (Grocery Outlet) shelves were only 1/2 full. Had to go to Safeway. If this keeps up I'm going to save less each month (currently only about 2k month)

GKs are very expensive. We're helping send DGD to Montessori school. THAT's expensive.

 

[SecondAttempt]

A few ideas / ramblings on the subject. etc.
But rather its that the dollar has been devalued?

Have you actually looked at historical charts over the last 10 years or so of the value of the dollar against other currencies, gold, and almost everything else except oil?

The dollar has not been devalued by any rational analysis based on actual observable facts.

 

[SecondAttempt]

"As of March 2021, COVID costs totaled $5.2 trillion. World War II cost $4.7 trillion (in today’s dollars)."

Hmm, maybe the US public health spending should exceed defense spending...

 

[GenXguy]

Because we spend our summer in a small apartment, we don't entertain. Therefore, we go out to eat as a part of our social interactions with folks. We are now (at least temporarily) ignoring Covid and partying like it's 2019! THAT return to normalcy is where we really notice inflation. Meals OUT are up at least 25% (probably more like 1/3.) YMMV

I never ate out much (except the company owned restaurant where I work), but I used to hit drive-thrus pretty regularly pre-COVID, but I've rarely even done that lately. Got burned by Arby's most recently when I went to take advantage of their $1 snack shake during happy hour (sign was still up), then at the pick-up window, they said it was $1.49 now! And I've changed my grocery shopping choices some and eat less to try to keep costs from soaring as much at the grocery store. Minimizing my driving, almost no discretionary/extra driving, but at least gas finally fell below $5/gal here.

 

[Koolau]

Have you actually looked at historical charts over the last 10 years or so of the value of the dollar against other currencies, gold, and almost everything else except oil?

The dollar has not been devalued by any rational analysis based on actual observable facts.

All those other currencies have also been devalued so it doesn't show vs the dollar. Make your comparison to what people buy and you can see the dollar has been devalued. What is the dollar worth in terms of houses, loaves of bread, cars, packs of gum, or reclining chairs? Thats how you determine that the dollar has been devalued - and it has been. YMMV

 

[SecondAttempt]

All those other currencies have also been devalued so it doesn't show vs the dollar. Make your comparison to what people buy and you can see the dollar has been devalued. What is the dollar worth in terms of houses, loaves of bread, cars, packs of gum, or reclining chairs? Thats how you determine that the dollar has been devalued - and it has been. YMMV

I get your point, and don't disagree. But that is inflation not a currency devaluation. That is also why I included gold in the list. We have inflation but I think it is being driven by supply chain factors rather than monetary policy. That's why I don''t think will respond to interest rate rises the way it has in the past.

Don't get me wrong, I am no fan of the sharp increase in government spending/debt, expansion of the money supply, artificially low interest rates, and so forth. I just don't think we are observing currency devaluation in the US or inflation driven by monetary policy.

I see it in the job market. I see young engineers demanding salaries close to what I make after 30+ years. And we either pay up or try to function short-handed. Trying to function short-handed has put everyone under stress and people are leaving to work for employers that will pay up. This is happening across all fields, not just engineers - accountants, technicians, even the custodians!

Fortunately I am optimistic that this will not last more that a year or two longer and then things will return to closer to normal.

 

[SecondAttempt]

Regarding my personal inflation rate, I have experienced -9.7% compound annual inflation since 2019, yes, deflation. I track all my finances in quicken and have for 25 years or so. My spending for the first half of 2019 was about 36% higher than this year. Most of this is due to lower gas expenses because I have a long commute and can now work from home about half the time and because my mortgage payment is significantly lower after refinancing to a ridiculously low rate for 30 years in 2020.

Many categories have gone up of course. Do I believe the inflation figures are real? Absolutely. But mortgage and fuel are two big categories for me so the huge reductions in those offset other areas.

 

[FLSUnFIRE]

My grocery spending is actually down 10% year over year (YTD). Part of that is "heck no, not buying X at that price" (substitution) and I also stocked up on non-perishables/frozen foods as I expected some inflation and am eating down inventory.



No easy way to calculate the "inflation" but best I can tell looking at prices, groceries I buy are 15% (most things)-400%(eggs) more expensive than last year. It makes it hard to shop as this high inflation rate makes IDing a "good deal" hard to this price conscious shopper.

 

[Koolau]

Regarding my personal inflation rate, I have experienced -9.7% compound annual inflation since 2019, yes, deflation. I track all my finances in quicken and have for 25 years or so. My spending for the first half of 2019 was about 36% higher than this year. Most of this is due to lower gas expenses because I have a long commute and can now work from home about half the time and because my mortgage payment is significantly lower after refinancing to a ridiculously low rate for 30 years in 2020.

Many categories have gone up of course. Do I believe the inflation figures are real? Absolutely. But mortgage and fuel are two big categories for me so the huge reductions in those offset other areas.

I'm not sure you should count spending less as negative inflation. I got rid of a car last year which means I saved at least a grand just for tags and insurance. Does that mean my personal inflation went down a grand? I look instead at the car I still have and realize that gas has doubled in cost and oil changes are up 1/3. Yes, I probably saved that "inflated" cost by deleting one car from my "rolling stock" but the actual inflation still exists. All in the way you look at things, I guess so YMMV.

 

[Magus]

I get your point, and don't disagree. But that is inflation not a currency devaluation. That is also why I included gold in the list. We have inflation but I think it is being driven by supply chain factors rather than monetary policy. That's why I don''t think will respond to interest rate rises the way it has in the past. .

So the 35% increase in the money supply in 2020 had no impact on inflation we've seen? LOL Politicians love blaming supply chain but it's probably not even 1/3 of the inflation we've seen in the last 2.5 years.

 

[ShokWaveRider]

We all measure our personal inflation differently. We are not the ultimate consumers and only buy things when we need or really want them. Stress Really, as for the most part it is just wanting to buy something new when it is not needed, just to make us feel better. While we do a little of this, it is not the norm. I am totally against clutter, so we are less likely to buy something on a whim.

The things we buy regularly on a monthly basis are utilities, food and fuel. So that is what I use to calculate our PI number. I do it for the current year to date , month to month and then again at the end of the year, for a given year. So, for example, our food expenses for the month of May were $485, for June they were $460, so not much difference. So far this month (July) it is $260 to date.

As you see that is just the way I do it. Of course, YMMV

 

[Koolau]

So the 35% increase in the money supply in 2020 had no impact on inflation we've seen? LOL Politicians love blaming supply chain but it's probably not even 1/3 of the inflation we've seen in the last 2.5 years.

To me, its sort of a perfect storm. Low (and and yet lower) interest rates, gobs of extra money supply, then Covid and then helicopter money. What could possibly go wrong? No one wants to w*rk for the available wages, so supply chains are interrupted (lots of other issues there, of course.) SO, possibly a doozy of a recession will be required to reset everything - assuming the FEDs (both monetarily and fiscally don't screw it up.) Returning you now...

 

[Magus]

To me, its sort of a perfect storm. Low (and and yet lower) interest rates, gobs of extra money supply, then Covid and then helicopter money. What could possibly go wrong? No one wants to w*rk for the available wages, so supply chains are interrupted (lots of other issues there, of course.) SO, possibly a doozy of a recession will be required to reset everything - assuming the FEDs (both monetarily and fiscally don't screw it up.) Returning you now...

A lot of the supply chain issues were caused by super high increased demand driven by high accommodative money policy all over. That’s one reason why I don’t put much blame on the supply chain. But yeah you are correct all around

 

[11522914]

So inflation started picking up in 2021 and was very high in 2022. So I went back to my Quicken to see how it affected my spending since I track every dollar spent.

Interesting that my spending in 2022 was less than 2021 ($141 less ). Amazingly I spent less in 2022 on groceries (25% drop), electricity, water, auto insurance, tv & internet, cell phones. Increases were seen in auto fuel, gas, property taxes, hazard insurance, restaurant meals. We even spent double in 2022 on traveling and installed a water heater.

I attribute those reductions in 2022 by just changing a few things. Much more grocery sales in 2022 than 2021 which allowed me to save considerably more by buying in bulk.

No major deferred maintenance other than the water heater so I'm sure that helped.

This is for me, DW and DD who spends summer away from college at home. We didn't feel deprived of anything in 2022.

So this is an example of where my personal inflation rate was basically unchanged in 2022 from 2021.

I'm tracking almost exactly the same spending in 2023 through the first half compared to 2022.

I'm planning on some major deferred home maintenance in 2023/2024 so I'm sure I'll be experiencing an increase in inflation when I start those projects. But since I have a huge increase in my income due to higher interest rates and my wife started collecting SS I don't see any issue handling the deferred maintenance. Actually because of the huge increase in fixed income I plan on spending way more on deferred maintenance without any reduction in my standard of living or net worth.

And I continue to find ways to reduce my expense costs.

Life is good

 

[ShokWaveRider]

^^^^^^^

We are tracking pretty much the same as last year to this time. (6 months) I did not do an exact calculation, but it seems pretty close.

 

[Montecfo]

Hard to compute accurately since there are both price changes and changes in volume.

My large variable is travel which would affect things far more than pricing changes generally.