What's your rate of inflation?

[Earl E Retyre]

Interesting NY times calculator to define your rate of inflation.

https://www.nytimes.com/interactive/2022/05/08/business/economy/inflation-calculator.html

"Inflation is at the highest level in four decades. But how you experience it can vary greatly depending on what you eat, how much you travel and your other spending habits. Answer seven questions to estimate your personal inflation rate."

Our rate of inflation came out to 6.4%.

The questions are:
- did you buy a car in the last year?
- How much do you drive?
- How much do you travel?
- Are you a vegetarian?
- Do you heat your home with oil?
- How often do you eat out?
- Do you pay for school?

In our case, even though we see an increase in food prices at the grocery store, we do not eat a lot. One chicken breast (which costs a little over $2) will be a dinner. One steak (which probably averages about $10) will feed us a dinner. Where we see the highest increases are real estate taxes and costs of repair.

The calculator is obviously not going to be accurate but makes a good point that your personal rate of inflation can be much less than what they are saying inflation is.

 

[aja8888]

Paywall for the NY Times. I can't use the calculator unless I subscribe.

 

[Earl E Retyre]

Paywall for the NY Times. I can't use the calculator unless I subscribe.

That's odd ... I do not have a subscription and it works for me.

 

[GenXguy]

Mine is very high because much of my budget in the coming years is for home maintenance items, and some of these things have skyrocketed in price. But I can't put a single figure on it - just that it's high! And of course, no online calculator is going to give me an accurate figure.

 

[aja8888]

That's odd ... I do not have a subscription and it works for me.

I believe they give you a few free articles and then block you. I must have used up my free stuff.

 

[MC Rider]

I believe they give you a few free articles and then block you. I must have used up my free stuff.

I think you are correct. I had a subscription for a while but no longer. Try again next month.

 

[madatrub]

Our rate of inflation came out to 6.4%.

The questions are:
- did you buy a car in the last year?
- How much do you drive?
- How much do you travel?
- Are you a vegetarian?
- Do you heat your home with oil?
- How often do you eat out?
- Do you pay for school?

Paywalled.

Surprised they don't ask you if you eat bugs.

 

[Calico]

This exact same thread was started a month ago.

https://www.early-retirement.org/fo...-not-the-current-cpi-or-cpiw-rate-114003.html

 

[Earl E Retyre]

This exact same thread was started a month ago.



https://www.early-retirement.org/fo...-not-the-current-cpi-or-cpiw-rate-114003.html

Sorry about that. DW pointed out the link to me today. But the link was from last May.

 

[Mulligan]

Paywall for the NY Times. I can't use the calculator unless I subscribe.

I must have peaked at a few myself as I was blocked. It probably wouldnt have worked well for me. My personal spending deflation was a record this past 12 months. I bought a new Blazer last December with $1000 off sticker plus 0%, and traded in an Explorer that they gave me over $3k more than I paid for it and I had a 2.9%. So my car payment went down and for some unknown reason my car insurance went down $200 annually also. Hopped on my GF’s company health insurance plan in January and my personal payment went from $700 to zero. Refinanced my house last fall from 3.875% to 2.75% that was a nice savings. So the trivial increase of spending in food and gas wasnt even noticed this year for me.

 

[razztazz]

Ya made me look.

1997: $14,453.00
2021: $16,500.00

This is what you'd call core expenses or ongoing structural expenses. Last year I had some deck work done and got a new A/C. (That cost!) Those are not part of the $16,500. That money comes out of the account pegged for one-time-honkus-expenses.

 

[rk911]

paywall. i have noticed the grocery bill going up and since we tend to eat out at the same places those costs have gone up as well. but i have not calculated the cost because inflation has not changed our buying habits.

 

[SecondCor521]

As part of my "wall chart" (see YMOYL), I have monthly expenditure numbers for everything (except college expenses for my kids) for about 10 years. When I have tried to curve fit that in the past, I have come up with a personal inflation rate of about 0.5% annually.

I think I've been able to maintain a low personal inflation rate by avoiding lifestyle creep and growing my frugality skills over time.

If I look at more recent data by comparing YTD 2022 with the comparable year ago period, I'm experiencing deflation of about 32%. The reasons for this are various - the four largest category decreases are due to (a) giving stock to my kids for Christmas instead of cash doesn't show up as an expense in Quicken, (b) the way I track food expenses for my voracious 22 year old depending on whether he is at home or at school, (c) the timing of home insurance and taxes, and (d) a change in my ACA subsidy because of the ARP Act.

None of these year-over-year changes are in any sense real. I'd guess I'm roughly flat if those changes are ignored. Gas is up, but I've responded by driving less and working on my car insurance and fuel costs (combining trips, driving less, buying gas more cheaply). Food is up, but I have switched to a cheaper store and more store brands. HOA dues are the only thing that is really that inflationary in my life that I can't do much about, and that was only from $250 a year to $400 a year.

The biggest change financially for me really is my 22 year old deciding to stop out of school for a while to reevaluate education/career/life. While I have a separate set of college accounts for that, it was still my largest expense by far. Recently, my six month look back budget was reflecting that about 52 percent of my expenses were his college expenses. Now I'm just in a holding pattern with those accounts until he decides how to move forward (return to expensive school, finish at a cheaper school, go to trade school, or something else).

 

[W2R]

- did you buy a car in the last year? no
- How much do you drive? 3000 miles/year
- How much do you travel? none
- Are you a vegetarian? no
- Do you heat your home with oil? no
- How often do you eat out? lunch every day (usually take-out)
- Do you pay for school? no

Could not get to the linked website but I answered the questions anyway.

I think my annual spending is affected more by the occasional big discretionary item purchased, than it is by general increases in food, fuel, or utilities. Perhaps the attached graph of my annual spending since retirement illustrates that.

For the graph I used my projected total spending for 2022 (since it's not over yet!), and it looks like total 2022 spending is up only 1.0018 times total 2021 spending. So I guess the effects of inflation on my expenses have not been too great so far. That said, I have a tendency to instinctively spend less during inflationary times, without actually trying.

 

[Koolau]

Mine came out 7%. I suppose that could be true, but the year is young. I have some major work coming up in our condo - if I can find anyone willing to do a "small" job.

 

[Teacher Terry]

I also couldn’t use the website. In the past year my youngest son remodeled my condo and saved me a ton of money in labor. He also found me suitable replacements for my cell and cable at a great savings. I used to eat out twice a week and now do twice a month.

I also stretched out some services such as having my dogs groomed every 12 weeks instead of 8 bathing and trimming them myself in between visits. I quit having my hair colored professionally and my friend is doing it. I am also stretching out the length of time between my dogs dentals.

 

[jldavid47]

I got to the website and the answer came out to 7% which is crap. Our actual spending for the past 12 months is 4.9% LOWER than our spending the previous 12 months. I would attribute that to my ability to manage the expense side of the ledger. Our income went up so we have been able to put more into savings.

Yes, prices have risen - substantially in some areas but our basket of spending isn't static. Almost nobody's is. An example for us is gasoline. We spent 193% more on gasoline in the past 12 months but at least half of that was due to more driving coming out of the pandemic restrictions. Even with that increase, gasoline only eats up 3.5% of our budget. The big hitters in our budget are insurance (14.7%), utilities (that includes cable TV, Internet, electricity, gas, telephone, water/sewer) at 13.4%, and food (8.4%). All of those categories were down over the past 12 months. even though food prices rose.

The ability to be flexible in spending helps a lot in inflationary times. Will we be so lucky the next 12 months? I have no idea. There is only so much I can do ultimately in managing the expense side. But so far, inflation hasn't hurt us too badly. Yet.

 

[Badger]

Can't use the link but our 3year old cars have less than 10k miles and we rarely eat out. Otherwise the answers are "no" so I imagine the impact is minor. Food prices and home/car insurance are the few expenses that will be influences.

Cheers!

 

[NomDeER]

My latest rent increase is about 20%, and rent is a very big percentage of my budget. It is difficult to compensate for this increase in other ways. I think rent inflation is really hurting low-income workers because it is such a big percentage of their incomes and they have so little discretionary spending.

Last month, I spent a large inflated amount of money on car repairs before going on a road trip using gas that was over six dollars a gallon.

My food costs have increased significantly. It's not just meat that is up. Some produce is way up. I very reluctantly bought lettuce the other day, which has increased 25% from a year ago. Avocados are definitely much pricier.

 

[W2R]

Could not get to the linked website but I answered the questions anyway.

I think my annual spending is affected more by the occasional big discretionary item purchased, than it is by general increases in food, fuel, or utilities. Perhaps the attached graph of my annual spending since retirement illustrates that.

For the graph I used my projected total spending for 2022 (since it's not over yet!), and it looks like total 2022 spending is up only 1.0018 times total 2021 spending. So I guess the effects of inflation on my expenses have not been too great so far. That said, I have a tendency to instinctively spend less during inflationary times, without actually trying.

OK, I just added up my spending (by categories) for the month of June, 2022. I spent 4.5% more than I spent in June 2021. The main categories I spent more on, were food and insurance. Some of the food increase was due to re-stocking my pantry, but my guess is that some was due to inflation too. Apparently this has mostly been in recent weeks and not for the whole year.

So, if my expenses keep increasing like this, I can cut back on food expenses by cooking more and not continuing to eat a take-out restaurant lunch every day. Not appealing to me but I have done that before and can do it again if I need to. Insurance is a higher priority for me. So far I feel no need to cut back.