Personal inflation rate?

[MasterBlaster]

Check out my early 2012 post when I discovered that my spending after 12 years had only gone up 2.3% in total. Talk about a tiny personal inflation rate! This did not include the occasional one-off expense or major splurge, but it did include all the "regular" expenses and splurges. http://www.early-retirement.org/for...etirement-progresses-59692-2.html#post1163645

Well your story dovetails with many finacial planners empirical storys of clients' spending which (by choice) stays nominally the same but declines in real terms with inflation.

It also supports front-loaded nestegg spending models like the the Bernike Reality Retirement Model.

 

[MichaelB]

The first 10 years of our retirement have also been "low inflation" in that our current budget is not much higher that it was the year I retired. There are some pretty significant differences, however. Three fewer people living at home, we moved away from a high cost of living location to a medium cost of living location, and we spend much less eating out now. From now on I am sure the inflation rate of our basket of goods and services will be equal to or greater than CPI. The only way to keep our expenses below CPI will involve substitution, but I don't see how to do that without a decline in standard of living.

 

[SJ1_]

... our plan is to not consider inflation in financial planning, by assuming that our net worth would balance out...


http://www.early-retirement.org/forums/f27/sharing-23-years-of-frugal-retirement-62251.html

That is our plan.

 

[rbmrtn]

Check out my early 2012 post when I discovered that my spending after 12 years had only gone up 2.3% in total. Talk about a tiny personal inflation rate! This did not include the occasional one-off expense or major splurge, but it did include all the "regular" expenses and splurges. http://www.early-retirement.org/for...etirement-progresses-59692-2.html#post1163645

Interesting, there is quite a bit of deviation year to year.

I went on my "retirement" budeget in 2008, made lots of cuts and adjustments. 2008 was down -22% from 2007
2009 was down -8% from 2008
2010 was down -5% from 2009
2010,2011,2012 spending is almost identical, no change basically
Total change 2012 is down -35% from 2007 but includes cutting fluff and waste.

 

[audreyh1]

Interesting, there is quite a bit of deviation year to year.

I went on my "retirement" budeget in 2008, made lots of cuts and adjustments. 2008 was down -22% from 2007
2009 was down -8% from 2008
2010 was down -5% from 2009
2010,2011,2012 spending is almost identical, no change basically
Total change 2012 is down -35% from 2007 but includes cutting fluff and waste.

Yes, there really was. If I'd done that "study" a year earlier, my spending was down 20% from year one, so I would have assumed a negative personal inflation rate. I think my spending is up this year, so I'll probably compute a higher inflation rate.