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

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

#201

Post by lotsofpulp »

Auracle wrote: post #178
lotsofpulp wrote: post #154

Earlier quoted context omitted.

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.

Yes, so that is a different product than the previous poster’s $2.5k per month daycare. If workers are hard to find in your rural area, a comparable daycare might not be too far from $2.5k per month.

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

#202

Post by linguae »

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…

This bout of inflation is very demoralizing. In 2020-21 home prices rose by over 30% in the area I was considering (the Monterey Bay Area). Home prices have stabilized since then, but unfortunately interest rates nearly doubled, pricing me out of the market (I tried to buy in 2021 when interest rates were low, but competition was heavy and I lost out to bidding wars). I’d have to move far outside the Bay Area (like Sacramento or Fresno) to be able to purchase a home in a safe neighborhood at current valuations and interest rates, and even then Sacramento has gotten pricey since 2020 (though still a bargain compared to the Bay Area). Food prices (both dining in and at the grocery store) have risen considerably, and my rent has consistently gone up by 8% annually. Yet my salary at my non-FAANG enterprise employer hasn’t caught up with inflation; I get the customarily low merit increases. Unfortunately switching jobs is very difficult right now due to layoffs and reduced investment in tech, not to mention I like my employer and switching jobs in an attempt to make more money means giving up the nice work environment I’m in.

While I’m able to get by, I feel that I can’t get ahead. I don’t see home prices falling anytime soon; the current high home prices are fueled by a lack of inventory caused by people not wanting to give up their 3% interest mortgages, yet if interest rates fall, demand will increase, pushing up purchase prices. The only way out is building more homes, except due to NIMBYism and geographical constraints, the only affordable new homes that are being built are in the Central Valley. I’m seeing the writing on the wall; eventually I’m going to need to make some drastic changes in my career and my location if I hope to own a home instead of being a perpetual renter.

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

#203

Post by TuringNYC »

sarchertech wrote: post #193
TuringNYC wrote: post #147

Earlier quoted context omitted.

Firstly I'm sorry to hear about your family's situation. I certainly dont mean to imply everything was rosy. I will compare very roughly and anecdotally across generations. I'm an Engineer (CS). So was my father, though he ended up doing accounting. So was my grandfather (civil.) My grandfather owned a home by 23 on his engineering salary. My father owned a comfortable home by 35 on his salary. The salary:homeprice r…

What was the size of your grandfather's home? If you built a comparable home today , the same distance from the center of a city of comparable size to the nearest city center when he bought the home, and you were allowed using comparable building codes, how much would that house cost? It's nearly impossible to actually compare these things. Comfort, and safety, are inherently difficult to value. Things like energy ef…

It is hard to make a comparison for my grandfather, but my father's home is right in my hometown and still exists.

You raise all great points. My father's home was in Brighton Beach in Brooklyn NYC. It cost under $50,000 in 1980.

The same house has a Zestimate today for $1,049,800. I wish we still owned it. For comparison sake, yes, there are 4 decades of upgrades and also 4 decades of deprecation, floods, hurricane sandy, etc.

In 1980, my mother didnt work, nor did most moms in the neighborhood. Today, many moms in the neighborhood work to make ends meet.

Interest rates were very high then, 10% compared to 6% now, though my did did re-fi when they dropped, so it wasnt a life-long issue.

It is hard to compare electric/gas/water/proptaxes because I was too young to remember that. However, at the highest level, you just need to look at:

RATIO of prevailing engineer wages in 1980 : $50,000

RATIO of prevailing engineer wages in 2023 : $1,049,800

That alone tells you there is a huge problem.

I'll admit:

- Food options today are way better

- Cars today are way more comfortable and way safer

- Entertainment in 2023 is way better (music, streaming tv, books)

- Healthcare is better for extreme cases (cancer) though arguable for the average case?

BUT

- College was almost free after grants. Student debt was tiny

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

#204

Post by Dig1t »

It seems like this might be a new form of taxation.

Instead of taxing people directly, which requires voter approval and creates bad press for the politicians involved, why not instead just create the money you need and pass the costs down to taxpayers in the form of inflation?

It is the worst kind of tax though because it affects the poorest people the most, since rich people have their assets that rise with inflation.

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

#205

Post by itake »

scarface_74 wrote: post #149
itake wrote: post #15

Earlier quoted context omitted.

> my stock income My investment portfolio profits (or RSU vests or bonuses) never make their way to my checking account. Are people really dipping into their investment accounts to cover living costs? Maybe for home or car purchases?

I definitely never kept my RSUs after they vested. I always diversified them over the six months. I wouldn’t have used 25-30% of my cash income to invest in my company stock. Why would I keep my RSUs instead of selling them? While I could live off of my base income working remotely in the burbs of Atlanta, there is no way that my friend who had to relocate to Seattle and had two kids and a wife could have managed on…

I always sell my RSUs as soon as I can, but the proceeds never touch my checking or savings account. I directly purchase ETFs.

When my base salary was $150k in SF, I worked a side contracting job to cover lifestyle costs so I could max out ESPP and 401k. Certainly if you have a family, you may not have the time to do that.

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

#206

Post by itake »

maxlamb wrote: post #29
itake wrote: post #15

Earlier quoted context omitted.

> my stock income My investment portfolio profits (or RSU vests or bonuses) never make their way to my checking account. Are people really dipping into their investment accounts to cover living costs? Maybe for home or car purchases?

Just saw an article about that a few days ago: https://fortune.com/2023/08/09/401k-hardship-distribution-bo...

I see articles like that every one to three months for the last 10 years.

I remember in 2010 there was an investigation reporting about how how shocking amount of credit card debt Americans have or etc.

I’m sure there is basis in reality, but I think these “X-type of person is having financial issues” blog articles are popular because people identifying with that problem (as small of a number of people that maybe) love sharing and pointing to the article to justify their own troubles. This creates more ad revenue for the producer.

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

#207

Post by therealdrag0 »

silisili wrote: post #176
throwaway6734 wrote: post #136

Earlier quoted context omitted.

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…

Some comparisons. My electricity (large SFH with 2 people) is 35$ a month (11c kWh)(in Seattle I let the 2nd floor get hot and only turn on AC from like 4-7pm, and most appliances are fairly energy efficient. So I’m not sure how to spend more electricity without an EV). My internet is maybe 70$ for 1gb (which I’ve never maxed out and could lower to like 300mb if needed) for Xfinity.

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

#208

Post by nostromo »

tmountain wrote: post #46
bko wrote: post #17

What I don't understand is this 2% price target. Prices could go up 10% one year, and well call it a success if next year we "tame inflation" by only having our prices go up 2%. Why can't we target to get prices back down? For those on a fixed income, this is money we lost forever. We expect (and see) some prices go down every year (mainly electronics) and it works fine. But god forbid the price of milk goes down a b…

Governments are afraid of deflation (prices going down) because consumers can go into a holding pattern (stopping spending while waiting for prices to continue to decrease) which can cause the economy to stall out.

Nobody is going to wait a year to save 3% on food or energy.

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

#209

Post by nostromo »

ferdowsi wrote: post #101
rhyme-boss wrote: post #60

Earlier quoted context omitted.

Prices drop and people spend less? That's silly.

So silly that it's exactly what happened during the Great Depression.

Context matters. Prices dropped because people had less money. They didn’t drop because people were sitting on piles of cash hoping for cheaper prices next year.

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

#210

Post by wonderwonder »

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…

It's death by a thousand cuts. New backpack for the oldest, new shoes for the youngest, oil change for the wife's car, leaf guards for the gutters so they don't clog the French drain I had to have installed due to my living room flooding. Dog has to get shots or heartworm meds... Choose the month and there is guaranteed to be $250 - $2000 in incidentals as a homeowner with kids. Wife's student loans kick in next month, $750 a month. It's crippling and I am lucky enough to do fairly well financially. I'm complaining but I'm aware that millions have it way worse than I do.
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