How's your budget doing? Are you noticing any recent impact from rising prices, or is it about the same?

Amanda Witman
By Amanda Witman on Thu, Sep 19, 2013 - 8:50am

We all know the story -- prices continue to rise while wages and salaries stagnate.  Are you personally feeling a pinch, or do things seem about the same to you as they have been for awhile?  What factors do you think are at play?

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8 Comments

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
Gratuitous tips.

Assuming that you have an income, Pay Yourself First.

When the paycheck comes in, decide how much you have the stones to draw out and leave everyone else to squabble over the remainder.

Then you have the problem of deciding how to deploy the paper.

Avoid the city (or town) like the plague. The bigger the city the worse the problem. Every time I go there I get fleeced. Shop over the internet. That way you have a little more control.

Pay with the folding stuff. That way you get to Feel the Pain and develop good avoidance behaviour.

Remember that you pay taxes on every dollar you earn. Assuming a real tax rate of 50%, if you can get by without needing to earn that dollar you have just cheated the taxman 50c. For example I ride a bicycle to work therefore I don't have to spend money on fuel, therefore I dont need to fork over a dollar, therefore I don't need to earn a buck fifty.

Cherish a very bad credit rating. My credit rating is in the swamps because I pay off any debt lightning fast. Banks hate that. If my credit rating suddenly improves then I know somebody is alaising me.

If someone offers you the deal of a lifetime, profanities are entirely appropriate. (Now that was an expensive lesson. It is yours for free.)

Wendy S. Delmater's picture
Wendy S. Delmater
Status: Diamond Member (Offline)
Joined: Dec 13 2009
Posts: 1982
Well, Amanda

1. Prices continue to rise while wages and salaries stagnate

Right. That's two problems: inflation and wage stagnation

Inflation is the first mentioned. The problem here is that I/we have always been frugal. I mean, back when he smoked my husband rolled his own ciggarettes, and he uses a straight razor because it's cheaper than disposables. I've always mended things and bought shoes that could be repaired, bought things at thrift stores and garage sales, made my own gifts, cooked from scratch, and clipped coupons. And as a southerner, I have learned to make inexpensive sun tea for those time swhen cold water is not quite enough. What else could we do?

Well, for one thing, we are more and more food independent. Its truly amazing how little a coupon for cents off on a can of fruit matters when you have a pantry full of home-canned peaches, apples, pears, and cherries. A coupon on jellies and jam is a joke compared to a pantry full of homemade jams. I've got all the pickles, pie fillings, and tomato sauce I can use, too.

We've started shopping at ALDI, a European based chain of VERY no-frills food stores. You have to put a quarter in to rent a cart, and either bring your own bags or buy one, or cart things off in their cardboard waste boxes. Boy, do they save you money. They do not carry everything, but what they have is like 1/3 off and is often better quality than what you would find in a traditional grocery. Examples: a bag of taco chips $1.19 for the same weight as $2 and up in the supermarket...and they are lower sodium. Four heads of baby lettuces for $1.99, and each head is enough for two or more big salads. Graham cracker pie crusts thicker and tastier than Keebler for $1.25 each. A can of refried beans is $1.50 and up in supermarkets; Aldi has them for $0.79. $1.50 for a big box of genereic Cheerios. $2.29/lb ground beef. $2 quarts of yogurt. Find an Aldi if here is one near you.

We send a lot of e-cards for holidays and birthdays, which saves not only on the cards but on postage.

Dinners out are at friends or relatives houses, homemade.

And although I doubt many would need or want to do this, we are ridding the house of teo humans and two cats. My son got married and moved out - and my step-daughter bought a fixer-upper house and is moving out in less than a month. We are saving on food and utilities, and will save more when we cancel the cable TV, which only the young people watched.

Wage stagnation. Last year we went through a wrenching experience where I had to stop engineering consulting for my old boss due to ethical issues. I took the last of my money from that and started a new business that shows promise. I highly recommend SCORE to help with starting a business, and Vista Print and FedEx Office (use them as an offsite color printer) for business printing. I do NOT recommend Legal Zoom. Overpriced.

My husband got no raise, again. But...he is a "rainmaker" - a person who generates income for a business or organization. He gets lots of overtime beacuse it's T& M work and makes them money. When the people in his office were on a 4-day week, he was not since he'd worked very hard at being indispensible in arcane areas that make the company money. And he keeps up on new developments in his field, too. This is a knowledge-based economy, and his knowledge of building information systems is such that he could take his choice of competitor jobs tomorrow. Plus, at home he ends up occasionally geting paid to do things like recover data from broken computers. He even sells older machines he repairs back to his company, because the clients would rather pay $1K for a 386 than spend $50K to upgrade their software.

2. Are you personally feeling a pinch, or do things seem about the same to you as they have been for awhile? 

I think we would be feeling the pinch had we not invested so heavily in energy efficiency. That's paying off, big time, to the point where even though rates per killowatt have gone up our balanced billing has gone down. A lot. The big-ticket item, a woodburning stove fireplace insert, saves us $300 a month over using a heat pump in the winnter. The summer heat is deflected by only $200 worth of Eco-Foil in the attic, saving us $30 a month in A/C on top of the $30 a month from the solar-powered attic fan, gable fans, and wiindow and door insulation. We save on not only hot water but on water itself with my repairs to a leaking solar hot water setup. (note: the EPA has just anounced regs that promise to make some electricity much more expensive)

So while we are feeling a little pinch from losing my second, part-time income, we are dealing with that. And in some ways--for the extended family-- it's better, since last month my son got a full time supervisory job in maintenance to replace his two part time jobs, and his new wife quit her part-time fast food job and started a full-time job this week.

3. What factors do you think are at play?

Frankly my husband's boss says everyone who is not income-producing, including possibly him, is going to part time due to the new health care regs in the USA. Another factor: my old boss got pushy and desperate because he serves the construction industry, and it's overbuilt. underfunded and dying.

jtwalsh's picture
jtwalsh
Status: Gold Member (Offline)
Joined: Oct 1 2008
Posts: 263
No Inflation

My wife and I are both professionals (attorney and teacher).  I have my own business she works for a municipal school district.  We are very fortunate.  I try never to complain, knowing that most folks have a much more difficult time of things. Still, it is very difficult, if not impossible to save.  We do attempt to purchase everything cash, no credit, and we have been able to hold onto a couple of months emergency fund.  We still have two adult sons and daughter at home, along with two grandchildren.  While they all work and cover most of their own expenses, none are self sufficient yet, and depend on us for housing, food and utilities. 

The one thing I do complain about is the supposed "low" inflation rate.  The government indexes and the main stream media keep claiming there is no serious inflation.  Here in the Northeast, prices for food, gasoline and energy, as well as taxes, all keep going up.  Each new contract, my wife has to pay more for our health insurance and less is covered.   

I have done our grocery shopping for the past twenty-two years and I too have discovered Aldi's as one recently opened in the next town.  I agree that prices are one third of those charged by the other chain stores.  The system is no frills, only one type of each item, bring your own bags, ect.  So far we have found the quality to be excelent and our only complaint has been that certain things sell out and you must waite a week or two for the items to be restocked.  That may just be an issue in our local store as it is new and the first one in the area.

I honestly don't know how most folks are getting by as wages here are stagnant and prices for necessaries keep rising.   I also worry about my children as the opportunities for them to get a good paying job to give them a decent start in life just does not seem to be there at present.

 

dreinmund's picture
dreinmund
Status: Member (Offline)
Joined: Mar 19 2011
Posts: 22
I'd like to point out one

I'd like to point out one anecdotal piece of "evidence" against the inflation in groceries. I have been shopping my milk at the local Walgreens for the past 4 years.

The price has NOT changed a single cent.

Dean's whole milk, Chicago suburbs, $2.89 regular, and about once a month on sale for $2.19. No change in 4 years whatsoever.

 

I don't know why, but it sort of flies in the face of the "grocery prices are exploding" theme.

FreeNL's picture
FreeNL
Status: Silver Member (Offline)
Joined: Mar 27 2013
Posts: 112
dreinmund wrote: I'd like to
dreinmund wrote:

I'd like to point out one anecdotal piece of "evidence" against the inflation in groceries. I have been shopping my milk at the local Walgreens for the past 4 years.

The price has NOT changed a single cent.

Dean's whole milk, Chicago suburbs, $2.89 regular, and about once a month on sale for $2.19. No change in 4 years whatsoever.

 

I don't know why, but it sort of flies in the face of the "grocery prices are exploding" theme.

I believe the price of milk is more highly regulated and subsidized and may not be a good indicator. At least it is in Canada. Try coffee.

gks's picture
gks
Status: Member (Offline)
Joined: Apr 3 2008
Posts: 1
milk

Indeed Milk pricing is SO regulated/controlled by the Dept of Ag. that is can't be used as a basis.  Plenty of dairy farmers are going out of business because the prices per 100wt don't actually cover the cost of production (much less processing and shipping).

Wendy S. Delmater's picture
Wendy S. Delmater
Status: Diamond Member (Offline)
Joined: Dec 13 2009
Posts: 1982
regulated milk prices.

Heck, yeah.

In NY, the price of milk was fixed, but cheese and butter were not fixed. Dairy farmers sold a lot of 1% and 2% milk and used the extra butter fat to make butter and cheese.

One of the biggest shocks in moving to SC was to see milk prices fluctuate with the market.

On an aside note, I watch the prices of imported foods. Example: black pepper was $1.99 for a tin three years ago. The same-sized tin of imported ground black pepper is now $3.49 - on sale.

jtwalsh's picture
jtwalsh
Status: Gold Member (Offline)
Joined: Oct 1 2008
Posts: 263
Milk

In suburban Boston a gallon of milk can sell for upwards of $3.75.  I have noticed that many convenience and drug stores use it as a loss leader by selling it regularly for around $2.50. They use the lower price to get you in the store.

I have seen the price of meat rising steadily over the past year. Beef prices seem to have increased the most but even chicken is more expensive than in the past.  It does make it hard to budget.

One good thing has been happening in my locale.  Two new supermarket chains have opened stores in the area.  This has resulted in a mini price war.  Sale items have increased in variety and the sale prices have been lower than in the recent past.  Each chain is fighting to hold onto customers.  If you have time and means to shop several chains for bargains you can save quite a bit.  I don't know how long this will last but it is good for the moment.

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