What Inflation Rate Will You Use for 2008?

[TromboneAl]

For those of you SWRers who increase your annual spending by inflation each year, what kind of a raise are you giving yourself this year?

[click here for last year's poll]

[Martha]

I'm taking a pay cut.

[TromboneAl]

Here's a link to the CPI numbers.

[REWahoo]

I'm giving myself a 1.5% "raise", down from 3% last year. We're reducing all discretionary spending from 2008 levels but still need the additional 1.5% to fully cover the big increases in our health insurance premiums.

[Moemg]

I also took a pay cut .

[OAG]

I said "0" which is pretty certain unless the CPI goes by about 6% for the rest of the Fiscal year. BTW our USA Official CPI is calculated Oct to Sep each year like the Government Fiscal Year.

[FIRE'd@51]

I believe Firecalc uses the December year-over-year number, which would be 0.1% for 2008.

[W2R]

Quote:

Originally Posted by TromboneAl Here's a link to the CPI numbers.

Interesting table about halfway down the page!

Comparing each month from 1997 through 2008, 2008 had the highest monthly inflation rate of any year for each month from January until October. That's October, when the market crashed IMO.

Then for October, November, and December 2008, inflation came to a screeching halt. Inflation was hardly above 0% for December. Interesting (to me, at least).

[RonBoyd]

I fall into the "status quo" category -- I hope not to need more this year than last. Besides...

Inflation Hedge.jpg

[audreyh1]

I'm not planning on spending any more this year than I did last year.

Our living expenses were only 2.57% higher in 2008 over 2007 which is pretty amazing considering how some expenses really went up in 2008.

So, I suspect we'll be able to pretty much keep expenses in line in 2009 especially with the big drop in fuel prices.

Audrey

[unclemick]

+20% Not inflation - got a tad carried away on cheap you know what last year.

Plus I'm not getting any younger and my coupla bucks extra might give the economy a hand.

Of course the gloom and doom news might cause me to chicken out.

Since my excess is usually travel/food/entertainment - I do have a fair amount of wiggle room - knock on wood.

Bad guys like insurance jumps/taxes/utilities/major household repair(unplanned), etc could upset the apple cart.

Defense = Norwegian 3% minimum SEC yield of portfolio & offense 5% variable of a upbeat portfolio. Take note of inflation and try to pick between 3-5% range my portfolio gives me.

heh heh heh - don't need no stinking spreadsheet - wet finger in belly button while squinting into the future helps prognosticate inflation. .

[Amethyst]

got a tad carried away on cheap you know what last year.

No, what? (facial expression of great interest)

Amethyst

[unclemick]

cheap bastardhood - a technical ER term refering to frugal carried out to levels some 'might' consider extreme.



heh heh heh - it's right up there with reusing dryer sheets. .

[dex]

.83%

[Purron]

3.5% based upon my cat's analysis of the cost of Fancy Feast. Hey, he's been right more often than I have.

[Bikerdude]

I'll need an additional 1% to pay increased taxes.

[OAG]

Opps I just re-read the poll - did not notice it was for 2008 (past tense). For 2008 I used 5.8% - the Government CPI (Oct 07 to Sep 08). For 2009, as I said previously, I am using 0% (although it could be negative, at the rate we are going).

[RonBoyd]

Quote:

Originally Posted by OAG Opps I just re-read the poll - did not notice it was for 2008 (past tense). ...

Quote:

Originally Posted by TromboneAl ... what kind of a raise are you giving yourself this year?

I fell for it also. I believe that's called "misdirection" in some circles.

Good one, TA.

[RonBoyd]

In the Present sense, here is an interesting article:

Back on Walton’s Mountain

Quote:

Here’s a question: How much less spending is a good thing? One percent? Three? And remember, everyone spends less in a different way. Person A decides not to buy a new car and, boom, that’s 25 percent less spending in one gesture. Person B avoids restaurants and coffee — 10 percent over a year. The economics of less probably don’t spread themselves out across the board evenly.

Quote:

And let’s also ask ourselves this: What if we actually do spend 10 percent less this year — and then decide to stay at that level? Is that healthy? Will China implode? What will be the next Iceland? The next Waterford Wedgwood?

Quote:

To make matters worse, capitalism doesn’t seem to be saving the day.

Quote:

And yet the prospect of less consumption fills us with dread. It’s not the having less part that is frightening — people are generally happy as long as everybody’s in the same boat. What’s frightening is the fear that our system can’t handle less, and it’s not as if there’s some other system out there shouting: “Try me! Try me!”

Hmmm. Reminds me of my earlier comment in this Thread (#32 & #34):

Quote:

It is more like what I believe is called the "Paradox of Thrift." You know, while it is a good thing for you personally to save all the money you can, it is very bad if everyone did the same thing. So the optimal thing for you personally is to convince as many people as you can to splurge at every opportunity. Savers are simply no good for any economy (read "to anyone"). We can ridicule those people that are more (most?) aggressive in their spending all we want but the bottom line is that's what makes our (your's and mine) life, in general, better. Another way I have heard it put is: "Kitty's heaven is Mousy's hell."

[bruce1]

My pension COLA was 2.8 %. I am hoping to live entirely on the pension and do a few renovations as well so I will not be travelling and will be on a budget. Bought new used car last year so transportation should be covered.

Bruce