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US inflation means families are spending $709 more per month than two years ago

cnn.com

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Re: US inflation means families are spending $709 more per month than two years ago

#171

Post by zer8k »

Waterluvian wrote: post #68
candiddevmike wrote: post #4

As a parent with kids, I really don't know how folks are getting by with the prices of everything. I know folks who keep eating out, buying new vehicles, and even building new houses and I'm left scratching my head wondering how they afford all of this. I'm not saving nearly as much as I was years ago and I think my "lifestyle" has decreased post COVID (few vacations, eating out is a treat, gifts are for birthdays/ho…

I think a lot of people get into a mindset that a 25 year mortgage is meant to be paid off in 25 years, so that mindset guides their entire frame of reference for how large a lifestyle to adopt. I’m not saying to rush through a mortgage. Do whatever you want. But consider not getting into a situation where you’re somehow struggling even though you’re one of the lucky few who can afford to even own a home. When times…

Paying off your mortgage with an interest rate less than inflation is a mathematically verifiable horrible idea. You're short the dollar deeply. Keep that short position for as long as you can because on a long enough horizon you'll be right so long as the Fed continues to manipulate the market.

That doesn't necessarily mean lever up. But it does mean take that extra X% you'd put into your mortgage and place it in some CDs/Bonds/whatever. Or even better, if inflation is still higher than the current rate you could even use it to buy an investment property and then pay that off as slow as possible as well. Let the banks hang themselves being long the dollar!

Debt is only bad when you're losing. The problem is it takes a level of sophistication to understand when you're winning. Hence, the need for Ramsey-type all-or-nothing solutions.

Re: US inflation means families are spending $709 more per month than two years ago

#172

Post by koprulusector »

adventured wrote: post #151
hikingsimulator wrote: post #113

Earlier quoted context omitted.

GDP isn't a good metric to compare household debt to. The US has an incredibly unequal society (see Gini index) and a lack of welfare compared to other Western countries. In aggregate, it means that debt is likely higher for households where that matters. The poor.

It's not the technical poor that suffer the most in the US, it's the next block up, the low income working class. The US has free healthcare for the bottom ~25%, including the poor. If you are in the low income working group, you're often largely out of luck. Those are the people suffering the most. They often don't qualify for EBT cards, they don't qualify for free healthcare, they don't qualify for housing subsidie…

How about both groups suffer far more than they should in any civilized, modern society. It’s not a contest which group is screwed over the most, let’s instead focus on why/how/what and solve.

Re: US inflation means families are spending $709 more per month than two years ago

#173

Post by lacrimacida »

candiddevmike wrote: post #4

As a parent with kids, I really don't know how folks are getting by with the prices of everything. I know folks who keep eating out, buying new vehicles, and even building new houses and I'm left scratching my head wondering how they afford all of this. I'm not saving nearly as much as I was years ago and I think my "lifestyle" has decreased post COVID (few vacations, eating out is a treat, gifts are for birthdays/ho…

> As a parent with kids, I really don't know how folks are getting by with the prices of everything. I know folks who keep eating out, buying new vehicles, and even building new houses and I'm left scratching my head wondering how they afford all of this.

I hear you perfectly. What I did a while ago was to fully embrace a more frugal lifestyle where attention and time are the most valued. So consumption went to a minimum and all that. Now after prices jumped up we’re where we started and despite being frugal we’re left with a lot less. It is quite unsettling to be honest…

Re: US inflation means families are spending $709 more per month than two years ago

#174

Post by tiffanyg »

TuringNYC wrote: post #25

I feel blessed to work in Tech, where -- however bad the economy is -- most of us dont face absolute deprivation as those in some other industries. That said, basic expectations of things growing up are just unreachable for many. My parents lived much more comfortable lives than I do. My grandparents even more so. Recall how food inflation was a major suspected cause of the Arab Spring ( https://www.pbs.org/newshour/…

My parents lived much more comfortable lives... grandparents even more so...

Interesting how you stopped at "grandparents".

To be clear, absolutely not intended as any kind of attack on you or what you've written - just some thoughts passed on to me that made it easier to be grateful for that which is in my life, period:

Consider past generations - we're in "the 1%" by that metric alone. No / hardly (any "real") medicine, completely unstable food supplies, other tribes coming over the hills and killing everyone ... and, that's describing more of the "history" part of human existence, to date.* Further, a core bias of psychology is "the golden age bias".** Including feelings as simple as: when events are in the past, things can seem so "neat", "orderly", and ... "simple". Oh for one income to feed a family of four, right? But, how many had that experience - what proportion? And, that ties in with "survivor bias" etc.

Don't get me wrong, instability is a PITA. I get where you're coming from. It's not as though I don't have such thoughts. But, I can always come back to various bits of wisdom I've picked up from a myriad of sources, including a phrasing I've always liked that AFAIK is from Bill Maher:

If you think you have it tough, read history books.

That always helps me to remember that I didn't just watch my village burn to the ground due to the Mongol or European or etc. raiders, my relatives get raped and murdered, my child die of ... well, just about anything ...

... maybe some in this thread will find these ideas useful as well.

* Zooming out a bit more ... I always find it amusing walking in a park, especially - hearing the birds chirping, seeing the squirrels "frolicking" ... what passes for a pleasant "pastoral" experience for us, is filled with advertisements for sex / nasty "neighbor property line disputes" (birds chirping), animals desperately trying to find the next meal or water, etc.

** https://rationalwiki.org/wiki/Good_old_days

Re: US inflation means families are spending $709 more per month than two years ago

#175

Post by dopylitty »

It's always seemed extremely disingenuous to lump all price rises into a single number called "inflation". It makes "inflation" seem like some kind of magic force that just happens and can only be solved by the equally magic application of something like fiscal policy. But it's not magic, price rises are the result of active and deliberate choices by companies and countries which could be solved with actual policy changes.

Housing prices go up because there is a shortage of housing and the housing that exists is being used as investments. The solutions could be to make it easy to build more housing and also to make policy changes to encourage other ways to save money.

Energy prices go up because we've wedded ourselves to fossil fuels that are controlled by very few players who can set whatever prices they want. The solutions might be to diversify energy sources and reduce energy consumption.

Food prices go up because of energy prices and because food companies are gouging for profits. The solutions might be to reduce the dependence on fossil fuels for food production and to not allow food production to be a for profit enterprise.

The prices of other goods went up because there was a global pandemic that disrupted supply chains around the world. The solution might be to build a more resilient system for providing goods rather than one that's cut to the bones to increase profits.

There are real solutions to the problems that cause price rises but as long as we treat "inflation" as some sort of magic force in the universe those solutions will continue to be ignored in favor of magical thinking and political arguing.

Re: US inflation means families are spending $709 more per month than two years ago

#176

Post by silisili »

throwaway6734 wrote: post #136
silisili wrote: post #10

Earlier quoted context omitted.

Same. I make decent money and used to save thousands per month. Now I'm lucky to stash away high hundreds a month, but any expense like new brakes wipes that out. I wonder how in the world everyone else is getting by. Maybe we're all just smiling and pretending here...

How? Where is all of your money going?

Without going into deep details and a budget... everything has gotten more expensive. Groceries are at least double what they were, over $1000 a month. Summer electric bill is over $300. Internet is now $140 a month. Health insurance is now over $500 per month, and that doesn't even cover the out of pocket stuff I have to pay with the kid's various visits. All streaming services have increased in price. And so on and so on.

I could go on and on, I'm sure I sound like a 'back in my day' old man. But the 'my day' in this case was just 5 years ago...

Re: US inflation means families are spending $709 more per month than two years ago

#177

Post by scarface_74 »

allthecybers wrote: post #19

My spouse and I have been talking about this quite a bit lately. Even with two incomes from tech employment we are watching our budget since it feels like everything is extra expensive lately. The income gains we’ve made have only allowed us to maintain versus climb to the next level of lifestyle. It makes me wonder where we will start falling behind. Obviously we are fortunate to not live on credit cards and have ou…

I bet wherever you are living you have a household income in the top 20% locally. I bet you’re spending a lot more on “something” than the median wage earner in your metro area.

Re: US inflation means families are spending $709 more per month than two years ago

#178

Post by Auracle »

lotsofpulp wrote: post #154
Auracle wrote: post #143

Earlier quoted context omitted.

Those prices are insane. I'm in a rural area but our daycare is $150 a week.

Now that is an insane price. I don’t think it even pencils out assuming the daycare is following minimum teacher student ratios and minimum wage, which means there is under the table pay going on or corners being cut somewhere.

It's a home daycare. She has 5 kids that she watches, and only one infant. I think that might be the maximum she's allowed - certainly only one infant. The infant price is more expensive as well.

Keep in mind that daycare centers themselves need to profit, so going "direct" would be cheaper.

Re: US inflation means families are spending $709 more per month than two years ago

#179

Post by scarface_74 »

ModernMech wrote: post #14

Every year for the past 5 years I’ve gotten a “merit raise” which hasn’t met inflation, so I’m effectively making less than I was when I started at my job despite having 5 years more experience. My organization puts a negative value on experience, and the only way I can get an actual raise is to jump ship. The story of my generation. Meanwhile they complain about a hiring and retention problem. Gee, I wonder why?

Any reason you haven’t changed jobs? A company has at most one full review cycle to not keep up with market before I start looking.

Re: US inflation means families are spending $709 more per month than two years ago

#180

Post by Waterluvian »

sarchertech wrote: post #152
Waterluvian wrote: post #68

Earlier quoted context omitted.

I think a lot of people get into a mindset that a 25 year mortgage is meant to be paid off in 25 years, so that mindset guides their entire frame of reference for how large a lifestyle to adopt. I’m not saying to rush through a mortgage. Do whatever you want. But consider not getting into a situation where you’re somehow struggling even though you’re one of the lucky few who can afford to even own a home. When times…

Paying off your mortgage early only really makes sense when you're getting close enough to retirement that you need to move more of your money to less risky investments with a lower rate of return.

My point isn’t that you need to race to pay it off. But that people think “how big a home/lifestyle can I afford with this income? I’ll do that.”

You could do half that, make minimum payments if you want, and invest the rest. But either way, you find yourself in such immense control. You could lose half your income and not change your lifestyle. Or retire early. Or take bigger risks.

I’ve always been fascinated how people decide what kind of home and car and such they go for. It usually seems to be: as big as I can go. And then you’re not really that more secure. I guess you can sell your home and find something smaller, but that’s hard to do at any time with kids in school, let alone during bad times.

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