How has inflation changed your expense/spending strategy?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Topic Author
sents13
Posts: 69
Joined: Fri Aug 27, 2021 6:06 pm

How has inflation changed your expense/spending strategy?

Post by sents13 »

Inflation does not seem to want to go away anytime soon. Despite what the consensus was 6mths ago, the inflation effects are not "temporary". Has that changed your expense/spending strategy?

Does it make sense to "pre-buy" stuff for the next 1 year to convert money into "real stuff"? In anticipation of supply chain disruption and shocks (either a continuation of the current situation or worsening), I'm thinking of stocking up 6-12mth of food and other daily necessities as much as I can, because these items will only be more expensive half a year down the road.
User avatar
willthrill81
Posts: 27092
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: How has inflation changed your expense/spending strategy?

Post by willthrill81 »

If you know that you're going to need an item in the near future and you can buy and store it now, why wouldn't you do so? It's better than buying TIPS or even I bonds these days since any nominal increase in the value of the item will not be taxed.
“Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men.” J.R.R. Tolkien, The Lord of the Rings
JoeJohnson
Posts: 487
Joined: Wed Jun 08, 2011 2:34 pm

Re: How has inflation changed your expense/spending strategy?

Post by JoeJohnson »

Zero changes to day-to-day

Mortgage and Auto are biggest line items. Both do not inflate and in fact have lowered with refinance.

We will drive (fuel) per normal and heat the house (natural gas) per normal.

Only thing I'll defer is rear deck rebuild if material or labor is unusually high next year.
financeidiot
Posts: 210
Joined: Sat Dec 24, 2016 12:10 pm

Re: How has inflation changed your expense/spending strategy?

Post by financeidiot »

Yes. I've taken on debt for the first time where favorable. 0% financing on large purchases is a good deal.
delamer
Posts: 12780
Joined: Tue Feb 08, 2011 6:13 pm

Re: How has inflation changed your expense/spending strategy?

Post by delamer »

No one knows if this level of inflation is temporary or not. Different components of living expenses have had very different rates of inflation recently: https://www.bls.gov/news.release/pdf/cpi.pdf

Energy price increases have been very large over the last year, but energy prices are volatile and have actually experienced deflation in some periods.

There’s only so many food and household products you can buy 6 months to a year out.

We are not changing anything regarding our purchasing, although I’m glad we have solar panels. :happy
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. | | Alexandre Dumas, fils
tomsense76
Posts: 1206
Joined: Wed Oct 14, 2020 1:52 am

Re: How has inflation changed your expense/spending strategy?

Post by tomsense76 »

No real changes honestly. For the most part my personal rate of inflation has not changed much. In fact for many months there was zero change. Have noticed a bit of an uptick recently.

Idk what it means to pre-buy things or how that would help.

Rent is one of my bigger expenditures. Have already signed my new lease, which saw an incredibly modest increase. Maybe this counts as pre-buying? Though rent is updated annually typically. So Idk if that helps much.

Next biggest expenditure is probably food. Though food has a tendency to go bad (unless it is canned, frozen, etc. for a long shelf life). I do have some goods like that, but don't really see those as a hedge against inflation. Other food is usually bought weekly. So it is what it is.

Actually am going out a bit more compared to last year. Was getting tired of being holed up indoors. Though with the weather changing that may change too.

Other things that might be worth pre-buying (cars, furniture, houses, etc.) have seen supply shrink and prices grow. Not sure that pre-buying would help these.

Outside of that taxes can also take a big bite out of one's paycheck. Taxflation is also a thing. Though Idk what one really does about that.

Am not sure whether the consensus has changed on inflation or whether the definition of temporary was fairly loose to begin with. How long it lasts is TBD. People seem to gravitate to one extreme or the other in terms of predicted duration. Likely both are overestimating. If one wanted to guess, maybe some average of these is more likely. Though the uncertainty in that guess remains high so we shall see.
"Anyone who claims to understand quantum theory is either lying or crazy" -- Richard Feynman
CurlyDave
Posts: 2935
Joined: Thu Jul 28, 2016 11:37 am

Re: How has inflation changed your expense/spending strategy?

Post by CurlyDave »

sents13 wrote: Mon Nov 15, 2021 11:51 pm
...Does it make sense to "pre-buy" stuff for the next 1 year to convert money into "real stuff"? ...
We pre-bought debt by refinancing about a year ago. Our primary residence and the rentals we have. We got 30-year fixed interest rates at all time lows. We don't have to worry about the debt spoiling in storage or about it being replaced by a newer version. It will never get freezer burn.
Answering a question is easy -- asking the right question is the hard part.
jebmke
Posts: 14052
Joined: Thu Apr 05, 2007 2:44 pm
Location: Delmarva Peninsula

Re: How has inflation changed your expense/spending strategy?

Post by jebmke »

Stuff is a low percentage of our spend so no change.
When you discover that you are riding a dead horse, the best strategy is to dismount.
UpperNwGuy
Posts: 6708
Joined: Sun Oct 08, 2017 7:16 pm

Re: How has inflation changed your expense/spending strategy?

Post by UpperNwGuy »

No changes here. I haven't experienced much inflation so far other than reading lots of chatter here on bogleheads.
livesoft
Posts: 78231
Joined: Thu Mar 01, 2007 8:00 pm

Re: How has inflation changed your expense/spending strategy?

Post by livesoft »

The 40% increase in the past 12 months of our US stock funds goes a very long way in burying any hint of inflation in our lives. We bought new fuel-efficient cars in the past 3 years; our kids are out of college and have great jobs; we have no mortgage payment; our home and location are energy efficient. Of course, I think it is true that most workers do not have a significant investment portfolio that they can access.

What's left to spend money on?

Vacations: I go backpacking. Shoes are have not gone up in price and are readily available. Airfares are about the same.

Eating out: It is true that prices are higher, but we do almost all take-out without drinks, so that helps reduce the cost.

Entertainment: We do not have cable subscriptions and ditched our phone landline a while ago. We are members of museums which give us free admission. Walking in the woods is free.

Healthcare: Haven't seen any increases there. Some things are noticeably less expensive.

What exactly do folks think I should be paying more money for because of inflation?

I do understand why inflation is in the news. It's a weapon.
Last edited by livesoft on Tue Nov 16, 2021 9:02 am, edited 1 time in total.
Wiki This signature message sponsored by sscritic: Learn to fish.
SlowMovingInvestor
Posts: 2881
Joined: Sun Sep 11, 2016 11:27 am

Re: How has inflation changed your expense/spending strategy?

Post by SlowMovingInvestor »

No changes at all.

If anything, I benefited slightly because I was able to selloff a really old car for more than I thought it would go for.
z3r0c00l
Posts: 2636
Joined: Fri Jul 06, 2012 11:43 am
Location: NYC

Re: How has inflation changed your expense/spending strategy?

Post by z3r0c00l »

sents13 wrote: Mon Nov 15, 2021 11:51 pm Inflation does not seem to want to go away anytime soon. Despite what the consensus was 6mths ago, the inflation effects are not "temporary". Has that changed your expense/spending strategy?

Does it make sense to "pre-buy" stuff for the next 1 year to convert money into "real stuff"? In anticipation of supply chain disruption and shocks (either a continuation of the current situation or worsening), I'm thinking of stocking up 6-12mth of food and other daily necessities as much as I can, because these items will only be more expensive half a year down the road.
I don't think a few months can tell us that inflation won't "go away anytime soon." Just like with investing, I don't make changes based on month-to-month numbers that have limited connection to my life, like the price of oil this month vs last. Full disclosure, I don't own or want to own a car so gas prices only matter to the extent they impact the price of food etc.

Here is what I have been/will continue to do:
  • Never what you describe here, which is exactly how inflation sticks around, people buying today what they may need tomorrow out of fear the price will go up.
  • Shop around for discounts and if something isn't priced right, I will pass on it. The pants I wear at work cost about $98 which is not cheap, but they occasionally go on sale for $54 which is not bad.
  • Mostly make my own food and generally avoid restaurants that keep raising their prices to unreasonable levels, for example I think $13+tax for a Lenwich sub is outrageous and they have lost my business.
  • Keep saving the maximum amount possible including maxing out I-bonds which have made this inflation bump relatively painless.
  • Push for an inflation-matching raise of 6% next year.
Last edited by z3r0c00l on Tue Nov 16, 2021 6:52 am, edited 2 times in total.
75% Global Stocks / 25% I-Bonds
RobLyons
Posts: 1218
Joined: Tue Oct 31, 2017 12:55 pm

Re: How has inflation changed your expense/spending strategy?

Post by RobLyons »

Not much change beyond I'm eating a more plant based diet. That's more for health reasons than inflation, but the rise in meat prices made the change a no brainer. We have changed our spending due to supply chain issues. If we see something we buy it on the spot rather than waiting for whatever reason. I started shopping at another grocery store due to sporadic outages at our usual store.
"Great parenting sets the foundation for a better world"
runner3081
Posts: 4632
Joined: Mon Aug 22, 2016 3:22 pm

Re: How has inflation changed your expense/spending strategy?

Post by runner3081 »

Not a single change for us. We really can't get any more efficient on spending (i.e., save more money when buying things), so we just deal with the higher costs.

We never ate much meat anyways, so that part isn't an issue, but even bread and other staples we do buy have gone up quite a bit. $.89 per loaf, is now $1.49, as an example.

The hardest part is just finding some things.
User avatar
JoeRetire
Posts: 10286
Joined: Tue Jan 16, 2018 2:44 pm

Re: How has inflation changed your expense/spending strategy?

Post by JoeRetire »

sents13 wrote: Mon Nov 15, 2021 11:51 pm Inflation does not seem to want to go away anytime soon. Despite what the consensus was 6mths ago, the inflation effects are not "temporary".
Depends on your definition of "temporary".
Has that changed your expense/spending strategy?
Not in the least.
Does it make sense to "pre-buy" stuff for the next 1 year to convert money into "real stuff"? In anticipation of supply chain disruption and shocks (either a continuation of the current situation or worsening), I'm thinking of stocking up 6-12mth of food and other daily necessities as much as I can, because these items will only be more expensive half a year down the road.
I see no need to pre-buy a year's worth of food, find a place to store it, and hope to use it up before it expires.

Neither you nor I know what food products will be more expensive 6 months from now, nor how much more expensive they might be.
I love a good nap. Sometimes it’s the only thing getting me out of bed in the morning.
Nowizard
Posts: 3665
Joined: Tue Oct 23, 2007 5:33 pm

Re: How has inflation changed your expense/spending strategy?

Post by Nowizard »

It doesn't. Generally, higher periods of inflation have been accompanied by higher returns on our particular investments.

Tim
Dusn
Posts: 50
Joined: Thu Feb 15, 2018 9:59 am

Re: How has inflation changed your expense/spending strategy?

Post by Dusn »

Stopped paying down the mortgage early. Increased stock market investing. Overall it’s been a great year financially. Investments have greatly outpaced inflation.
Broken Man 1999
Posts: 6818
Joined: Wed Apr 08, 2015 11:31 am
Location: West coast of Florida, near Champa Bay !

Re: How has inflation changed your expense/spending strategy?

Post by Broken Man 1999 »

DW complains about food and gas (those are her expenses) but I haven’t noticed any less grub in the house and she still runs hither and yon.

She hasn’t asked for me to set up her receiving more $$$ from her IRA, so she isn’t hurting it would seem.

I haven’t noticed much change myself.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go." - Mark Twain
poker27
Posts: 961
Joined: Mon Apr 01, 2013 2:48 pm

Re: How has inflation changed your expense/spending strategy?

Post by poker27 »

I was out last weekend and noticed that most beers which I recalled being $6-7 were now $8-9. Still drank to my hearts content, so I guess not much.

Prices rarely come back down, so I highly doubt waiting 6-12 months will be of any advantage.
User avatar
Sandtrap
Posts: 14789
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii No Ka Oi , N. Arizona

Re: How has inflation changed your expense/spending strategy?

Post by Sandtrap »

Dialogue yesterday.

me: "you know, we havn't collected SS yet because we don't need it and can wait to maximize it. . ."

spouse: "that's nice. . .when we do. . it's always nice to spend more. . "
(spouse is very frugal so kidding).

me: "did you know that many people have the attitude to spend down all of thier money in retirement to nothing?"

spouse: "how and why would we every do that?"

. . . . . :oops:

Save very amply, invest wisely, live below your means. . . inflation is not an issue.

j :D
Last edited by Sandtrap on Tue Nov 16, 2021 9:44 am, edited 2 times in total.
Wiki Bogleheads Wiki: Everything You Need to Know
Ramjet
Posts: 1259
Joined: Thu Feb 06, 2020 11:45 am
Location: Ohio

Re: How has inflation changed your expense/spending strategy?

Post by Ramjet »

Just a little more mindful at the grocery store for us

Other than that, nothing else
VT & HFEA
rage_phish
Posts: 432
Joined: Thu Jan 31, 2019 4:27 pm

Re: How has inflation changed your expense/spending strategy?

Post by rage_phish »

I’m buying much less red meat, and instead focusing on cheaper proteins
fortunefavored
Posts: 796
Joined: Tue Jun 02, 2015 8:18 pm

Re: How has inflation changed your expense/spending strategy?

Post by fortunefavored »

I noticed my grocery bill has ticked up about $50/month. That is .08% of my housing costs.

If you own your house, don't need a new car, and don't consume a lot of energy.. inflation is barely a blip right now.

(I'm semi-excluding healthcare inflation.. because that's been raging for years.)
lazynovice
Posts: 2206
Joined: Mon Apr 16, 2012 10:48 pm

Re: How has inflation changed your expense/spending strategy?

Post by lazynovice »

We’ve seen increases in certain items-

Property taxes because our home’s market value has increased 30% in four years.

Homeowners insurance because of hail and fires in our state.

Gasoline but working from home has greatly reduced our spending on that

Eating out because wages for those employees have increased. Places that don’t increase the wages are now closed for anything but dinner due to lack of staff. We bring most meals home because of the pandemic which saves money on the extras like appetizers and drinks. I don’t think we’ll ever sit in restaurants to the extent we used to as long as the ability to bring food home stays as-is.

Clothing prices are higher but working from home means fewer purchases.

Groceries have increased in price but as a % of total spending, not enough to make a difference in what we buy.

We have not taken any big vacations since 2019 due to the pandemic. The small trips to see family have cost far less than two years ago.

Our spending dropped dramatically in March 2020 and rebounded slightly by early 2021. We are still spending far less than pre-pandemic.
“I didn’t want my sailboat to be in the driveway when I died.” Nomadland
User avatar
dodecahedron
Posts: 6044
Joined: Tue Nov 12, 2013 12:28 pm

Re: How has inflation changed your expense/spending strategy?

Post by dodecahedron »

JoeRetire wrote: Tue Nov 16, 2021 9:05 am
sents13 wrote: Mon Nov 15, 2021 11:51 pm Inflation does not seem to want to go away anytime soon. Despite what the consensus was 6mths ago, the inflation effects are not "temporary".
Depends on your definition of "temporary".
Has that changed your expense/spending strategy?
Not in the least.
Does it make sense to "pre-buy" stuff for the next 1 year to convert money into "real stuff"? In anticipation of supply chain disruption and shocks (either a continuation of the current situation or worsening), I'm thinking of stocking up 6-12mth of food and other daily necessities as much as I can, because these items will only be more expensive half a year down the road.
I see no need to pre-buy a year's worth of food, find a place to store it, and hope to use it up before it expires.
I *mostly* agree with the above, but

1) at this time of year, I always stock up on non-perishables with an eye to being prepared for getting through bad spells of winter weather and avoiding shopping at the crazy busy times immediately before blizzards/winter storms

2) storage space is not a constraint

AND

3) a couple days ago my favorite nearby local grocery store sent me an electronic coupon for $11 off a $100 total purchase that expired yesterday

So even though I was not in urgent need of groceries yesterday, I went out and bought a bunch of stuff (steel cut oats, flaxseed, dried beans, frozen veggies, frozen fruit, peanut butter) that I had not previously been planning to buy in order to be sure to hit $100 to get the $11 off before the coupon expired. Definitely not a year's worth, but I am confident it will get used by next spring.

Prices were not noticeably higher than what I had remembered paying for these items earlier this year, and the possibility of additional inflation looming later added some additional motivation for my trip. I also derive a frugal sense of satisfaction from the root vegetables (potatoes, onions, sweet potatoes) I am storing from my CSA farmshare, which ran weekly deliveries from June through early November.

That said, food costs are a very small portion of my household budget, particularly since public health considerations plus advent of cold weather are pretty much eliminating the dining out portion.
H-Town
Posts: 3899
Joined: Sun Feb 26, 2017 2:08 pm

Re: How has inflation changed your expense/spending strategy?

Post by H-Town »

sents13 wrote: Mon Nov 15, 2021 11:51 pm Inflation does not seem to want to go away anytime soon. Despite what the consensus was 6mths ago, the inflation effects are not "temporary". Has that changed your expense/spending strategy?

Does it make sense to "pre-buy" stuff for the next 1 year to convert money into "real stuff"? In anticipation of supply chain disruption and shocks (either a continuation of the current situation or worsening), I'm thinking of stocking up 6-12mth of food and other daily necessities as much as I can, because these items will only be more expensive half a year down the road.
We only "pre-buy" stuff when it makes sense, i.e. coupons from Costco on staple household items. We run a "no-waste" approach when it comes to groceries & household items.

Our house is paid off. So do our cars. With car price going crazy nowadays, we just keep our old cars longer. We have no desire to buy a new car at this price.

We don't see noticeable increase in our groceries spending. The price of whole food (chicken, red meat, dairy products, produce, etc.) have not changed much in our area. We also notice the cost of dining out do not change much either.

Our savings in term of dollars continue to increase, and it's because of an increase in income. Our total spending is still pretty flat line.
Time is the ultimate currency. My ultimate wealth is the full control of how I spend my time.
ensign_lee
Posts: 448
Joined: Fri Mar 12, 2010 10:03 am

Re: How has inflation changed your expense/spending strategy?

Post by ensign_lee »

no changes here.

Supply chain should catch up by this time next year or at the very worst 2023. I'm certainly not going to contribute to the problem by buying stuff I don't need.

And if I'm wrong and it really isn't transitory, well, I've left a large part of my asset allocation in that asset that starts with a B that we're not allowed to discuss here.
User avatar
burritoLover
Posts: 1191
Joined: Sun Jul 05, 2020 12:13 pm

Re: How has inflation changed your expense/spending strategy?

Post by burritoLover »

When they say this is the largest inflation spike in 30 years, you might want to see what happened 30 years ago. You could have had a "sky-is-falling-I-have-to-milk-my-own-cows" fear then too.
"Your money is like a bar of soap. The more you handle it, the less you’ll have." - Gene Fama
User avatar
willthrill81
Posts: 27092
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: How has inflation changed your expense/spending strategy?

Post by willthrill81 »

burritoLover wrote: Tue Nov 16, 2021 11:24 am When they say this is the largest inflation spike in 30 years, you might want to see what happened 30 years ago. You could have had a "sky-is-falling-I-have-to-milk-my-own-cows" fear then too.
True, but 10 year Treasuries were yielding 8-9% in 1990. So even with the spike in inflation back then, holders of 10 year Treasuries were still getting positive real returns. Right now, the spread between 10 year Treasury yields and inflation is about -4.5%.

Folks can argue all day about whether an inflation spike will hurt stocks or not, but there's no disputing that unexpected inflation is bad for nominal bonds, especially if it's significant and lasting. This inflation is certainly significant, but no one knows yet if it will be lasting.
“Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men.” J.R.R. Tolkien, The Lord of the Rings
mnsportsgeek
Posts: 409
Joined: Mon Jan 19, 2015 1:39 pm

Re: How has inflation changed your expense/spending strategy?

Post by mnsportsgeek »

I've noticed the inflation most with my grocery bill. My day to day spending has not changed, but it does hurt a little more.
User avatar
burritoLover
Posts: 1191
Joined: Sun Jul 05, 2020 12:13 pm

Re: How has inflation changed your expense/spending strategy?

Post by burritoLover »

willthrill81 wrote: Tue Nov 16, 2021 11:28 am
burritoLover wrote: Tue Nov 16, 2021 11:24 am When they say this is the largest inflation spike in 30 years, you might want to see what happened 30 years ago. You could have had a "sky-is-falling-I-have-to-milk-my-own-cows" fear then too.
True, but 10 year Treasuries were yielding 8-9% in 1990. So even with the spike in inflation back then, holders of 10 year Treasuries were still getting positive real returns. Right now, the spread between 10 year Treasury yields and inflation is about -4.5%.

Folks can argue all day about whether an inflation spike will hurt stocks or not, but there's no disputing that unexpected inflation is bad for nominal bonds, especially if it's significant and lasting. This inflation is certainly significant, but no one knows yet if it will be lasting.
People keep claiming it is here stay after 1 year? There was basically no inflation last year. Hardly a trend.
"Your money is like a bar of soap. The more you handle it, the less you’ll have." - Gene Fama
User avatar
willthrill81
Posts: 27092
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: How has inflation changed your expense/spending strategy?

Post by willthrill81 »

burritoLover wrote: Tue Nov 16, 2021 11:35 am
willthrill81 wrote: Tue Nov 16, 2021 11:28 am
burritoLover wrote: Tue Nov 16, 2021 11:24 am When they say this is the largest inflation spike in 30 years, you might want to see what happened 30 years ago. You could have had a "sky-is-falling-I-have-to-milk-my-own-cows" fear then too.
True, but 10 year Treasuries were yielding 8-9% in 1990. So even with the spike in inflation back then, holders of 10 year Treasuries were still getting positive real returns. Right now, the spread between 10 year Treasury yields and inflation is about -4.5%.

Folks can argue all day about whether an inflation spike will hurt stocks or not, but there's no disputing that unexpected inflation is bad for nominal bonds, especially if it's significant and lasting. This inflation is certainly significant, but no one knows yet if it will be lasting.
People keep claiming it is here stay after 1 year? There was basically no inflation last year. Hardly a trend.
I agree that we haven't seen significant inflation over a lengthy period of time yet. How long this inflation will last is the $64,000 question, and no one knows the answer.
“Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men.” J.R.R. Tolkien, The Lord of the Rings
User avatar
ResearchMed
Posts: 12693
Joined: Fri Dec 26, 2008 11:25 pm

Re: How has inflation changed your expense/spending strategy?

Post by ResearchMed »

willthrill81 wrote: Tue Nov 16, 2021 11:37 am
burritoLover wrote: Tue Nov 16, 2021 11:35 am
willthrill81 wrote: Tue Nov 16, 2021 11:28 am
burritoLover wrote: Tue Nov 16, 2021 11:24 am When they say this is the largest inflation spike in 30 years, you might want to see what happened 30 years ago. You could have had a "sky-is-falling-I-have-to-milk-my-own-cows" fear then too.
True, but 10 year Treasuries were yielding 8-9% in 1990. So even with the spike in inflation back then, holders of 10 year Treasuries were still getting positive real returns. Right now, the spread between 10 year Treasury yields and inflation is about -4.5%.

Folks can argue all day about whether an inflation spike will hurt stocks or not, but there's no disputing that unexpected inflation is bad for nominal bonds, especially if it's significant and lasting. This inflation is certainly significant, but no one knows yet if it will be lasting.
People keep claiming it is here stay after 1 year? There was basically no inflation last year. Hardly a trend.
I agree that we haven't seen significant inflation over a lengthy period of time yet. How long this inflation will last is the $64,000 question, and no one knows the answer.
But $64,000 isn't worth what it was back then in the quiz show days....!
The $640,000 question? More? :wink:

RM
This signature is a placebo. You are in the control group.
supalong52
Posts: 546
Joined: Tue Feb 09, 2010 1:51 pm

Re: How has inflation changed your expense/spending strategy?

Post by supalong52 »

ResearchMed wrote: Tue Nov 16, 2021 11:41 am
willthrill81 wrote: Tue Nov 16, 2021 11:37 am
burritoLover wrote: Tue Nov 16, 2021 11:35 am
willthrill81 wrote: Tue Nov 16, 2021 11:28 am
burritoLover wrote: Tue Nov 16, 2021 11:24 am When they say this is the largest inflation spike in 30 years, you might want to see what happened 30 years ago. You could have had a "sky-is-falling-I-have-to-milk-my-own-cows" fear then too.
True, but 10 year Treasuries were yielding 8-9% in 1990. So even with the spike in inflation back then, holders of 10 year Treasuries were still getting positive real returns. Right now, the spread between 10 year Treasury yields and inflation is about -4.5%.

Folks can argue all day about whether an inflation spike will hurt stocks or not, but there's no disputing that unexpected inflation is bad for nominal bonds, especially if it's significant and lasting. This inflation is certainly significant, but no one knows yet if it will be lasting.
People keep claiming it is here stay after 1 year? There was basically no inflation last year. Hardly a trend.
I agree that we haven't seen significant inflation over a lengthy period of time yet. How long this inflation will last is the $64,000 question, and no one knows the answer.
But $64,000 isn't worth what it was back then in the quiz show days....!
The $640,000 question? More? :wink:

RM
Originally it was $64 question. A colleague used to say that and I always thought he accidentally left off the thousand until I looked it up.
adamthesmythe
Posts: 4503
Joined: Mon Sep 22, 2014 4:47 pm

Re: How has inflation changed your expense/spending strategy?

Post by adamthesmythe »

I buy bread every morning before the price doubles in the afternoon.
WhiteMaxima
Posts: 2499
Joined: Thu May 19, 2016 5:04 pm

Re: How has inflation changed your expense/spending strategy?

Post by WhiteMaxima »

Not a lot. Just be more aware of food waste and energy waste. DIY more.
User avatar
ResearchMed
Posts: 12693
Joined: Fri Dec 26, 2008 11:25 pm

Re: How has inflation changed your expense/spending strategy?

Post by ResearchMed »

supalong52 wrote: Tue Nov 16, 2021 11:44 am
ResearchMed wrote: Tue Nov 16, 2021 11:41 am
willthrill81 wrote: Tue Nov 16, 2021 11:37 am
burritoLover wrote: Tue Nov 16, 2021 11:35 am
willthrill81 wrote: Tue Nov 16, 2021 11:28 am

True, but 10 year Treasuries were yielding 8-9% in 1990. So even with the spike in inflation back then, holders of 10 year Treasuries were still getting positive real returns. Right now, the spread between 10 year Treasury yields and inflation is about -4.5%.

Folks can argue all day about whether an inflation spike will hurt stocks or not, but there's no disputing that unexpected inflation is bad for nominal bonds, especially if it's significant and lasting. This inflation is certainly significant, but no one knows yet if it will be lasting.
People keep claiming it is here stay after 1 year? There was basically no inflation last year. Hardly a trend.
I agree that we haven't seen significant inflation over a lengthy period of time yet. How long this inflation will last is the $64,000 question, and no one knows the answer.
But $64,000 isn't worth what it was back then in the quiz show days....!
The $640,000 question? More? :wink:

RM
Originally it was $64 question. A colleague used to say that and I always thought he accidentally left off the thousand until I looked it up.
Heh!
I never knew that.
But then, I was old enough to watch "The $64,000 Question" but not that radio show.
And now... I'll have an earworm with that jingly "isolation booth" music, probably for the rest of the day, or maybe week...
Thanks! :annoyed

RM
This signature is a placebo. You are in the control group.
Broken Man 1999
Posts: 6818
Joined: Wed Apr 08, 2015 11:31 am
Location: West coast of Florida, near Champa Bay !

Re: How has inflation changed your expense/spending strategy?

Post by Broken Man 1999 »

ResearchMed wrote: Tue Nov 16, 2021 11:50 am
supalong52 wrote: Tue Nov 16, 2021 11:44 am
ResearchMed wrote: Tue Nov 16, 2021 11:41 am
willthrill81 wrote: Tue Nov 16, 2021 11:37 am
burritoLover wrote: Tue Nov 16, 2021 11:35 am
People keep claiming it is here stay after 1 year? There was basically no inflation last year. Hardly a trend.
I agree that we haven't seen significant inflation over a lengthy period of time yet. How long this inflation will last is the $64,000 question, and no one knows the answer.
But $64,000 isn't worth what it was back then in the quiz show days....!
The $640,000 question? More? :wink:

RM
Originally it was $64 question. A colleague used to say that and I always thought he accidentally left off the thousand until I looked it up.
Heh!
I never knew that.
But then, I was old enough to watch "The $64,000 Question" but not that radio show.
And now... I'll have an earworm with that jingly "isolation booth" music, probably for the rest of the day, or maybe week...
Thanks! :annoyed

RM
Nothing is as bad as having Disney's It's a Small World playing in your head. Starts off so gentle, so mellow, then builds and builds and builds...... :twisted:

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go." - Mark Twain
Carguy85
Posts: 643
Joined: Thu Mar 19, 2020 6:26 pm

Re: How has inflation changed your expense/spending strategy?

Post by Carguy85 »

I have been told to lower my expectations and pretend that what I see isn’t what is really happening or will only be a blip (transitory). That being said, thankfully we aren’t living paycheck to paycheck. I really don’t have a near term solution on cutting down much on fuel for the vehicles or propane for the furnace even though it’s now 50% more. Thankfully I got my truck with significant discounts before big issues in the auto industry arose. Speaking of which, the massive rise in vehicle prices and supply chain issues (6mo or more out on some parts) has certainly prolonged my search/ effected my spending on the next project car... more money is going to Vanguard instead. I was at the local farm store the other day and saw a big stack of a specific type of ammo this time with no purchase limit and was strongly considering picking up 1000 rounds even though it’s now exactly double what it was 18 mo ago...it actually has come down a bit in the last several months.
User avatar
JoeRetire
Posts: 10286
Joined: Tue Jan 16, 2018 2:44 pm

Re: How has inflation changed your expense/spending strategy?

Post by JoeRetire »

adamthesmythe wrote: Tue Nov 16, 2021 11:44 am I buy bread every morning before the price doubles in the afternoon.
Smart!

You can really save some dough that way.
I love a good nap. Sometimes it’s the only thing getting me out of bed in the morning.
cshell2
Posts: 718
Joined: Thu May 09, 2019 10:29 am

Re: How has inflation changed your expense/spending strategy?

Post by cshell2 »

I have a pretty tight budget, so the increase in costs of gas and groceries has stung some, but not enough that I've made any drastic changes to what I buy yet. I have quite a bit of wiggle room in the grocery department because I tend to get a lot of convenience foods, but gas is what it is and I don't know what to do there outside of buy something more fuel efficient. I am grateful I prebuy all my LP in July so I don't have to worry about crazy heating costs this winter.
livesoft
Posts: 78231
Joined: Thu Mar 01, 2007 8:00 pm

Re: How has inflation changed your expense/spending strategy?

Post by livesoft »

There are no supply chain problems in our household. Maybe this pic helps demonstrate that:

Image
Wiki This signature message sponsored by sscritic: Learn to fish.
Stoic9
Posts: 224
Joined: Mon Dec 10, 2018 7:14 am

Re: How has inflation changed your expense/spending strategy?

Post by Stoic9 »

Two stories:
We have not changed. Yes inflation is slightly higher than last year when we spent very little. This year inflation is higher and so are our market returns, and our rents. We expect our pensions to increase in JAN. On our 5th year of retirement and our buying power is higher each year, higher than inflation for sure.

However our neighbor is on a true fixed income with only SS. They are experiencing inflation every day, food, heating, property taxes (inflation in housing market) and no solution. At 89 difficult to go back to work.
User avatar
ray.james
Posts: 1555
Joined: Tue Jul 19, 2011 4:08 am

Re: How has inflation changed your expense/spending strategy?

Post by ray.james »

On a personal level the only inflation I am seeing is services and energy - restaurant food, home repair/contractors , commute(gas) & electricity. Of these only home renovations are impactful ones as a percentage of our spending. We finished ours this year and skipped the bathrooms as the cost is too prohibitive.

I also think the low population growth and labor shortages either drive inflation or cause robotics/automation at a level unseen before in the next 5-7 years. These things are happening very subtly all around us. Most MCD's have ordering stations now. Home depot, Costco and plenty others use self checkouts. Who have seen bank tellers in the last year. Warehouse were able to handle the delivery load this past year due to robots. Ofcourse the extra drivers and workers helped but if not for robots, the shortage of delivery items would be vastly higher. Deere and caterpillar have started to use 3D printing in large scale for small, challenging parts that were made with human intervention. Yet we have 10M job openings. Before anyone thinks these are low paying, 870k in Manufacturing, 2.2M in professional services, 1.8M in utility and energy, 1.2M in transportation.
Last edited by ray.james on Tue Nov 16, 2021 5:39 pm, edited 1 time in total.
When in doubt, http://www.bogleheads.org/forum/viewtopic.php?f=1&t=79939
JackoC
Posts: 2840
Joined: Sun Aug 12, 2018 11:14 am

Re: How has inflation changed your expense/spending strategy?

Post by JackoC »

A lot of apparent pride in 'absolutely positively no change'. I find that a little puzzling on a forum with so much discussion of minor savings by so many cheapskates (an accusation often hurled at me in real life though I'm more profligate relatively speaking here). Relative changes in the prices of goods I'd expect to generate more of that. And the general price level increasing faster is usually characterized by sharper relative changes. Although, everything in US society is political now. Moderators on a forum can't stop it seeping through in people's statements on supposedly non-political topics. And one side of the divide is clearly more eager to downplay and the other side play up the recent increase in inflation. So maybe that's part of it.

In our case of course it has some effect, again mainly where particular things have increased especially much. I sold a car in part because the used price was high. My process of thinking about and carrying out the replacement process is obviously also influenced by the tight market, why would it not be? Similarly if eg. the natural gas price in the heating bill goes up 50% (wholesale nat gas has gone up more, don't know what will flow through in the utility bill) I don't see why it would necessarily have 0% impact on where I set the thermostat program. Not a huge impact, but I don't see why our reaction to the biggest price increases would necessarily be zero.
Afty
Posts: 1842
Joined: Sun Sep 07, 2014 5:31 pm

Re: How has inflation changed your expense/spending strategy?

Post by Afty »

We’ve delayed some large, optional purchases. We were planning to replace one of our cars, but with current prices and supply issues, plus the fact that our current car is fine, we'll hold off until supply issues iron themselves out. We have also been discussing getting solar panels, but it’s not necessary and supply appears to be low, so again we'll wait it out.

Another change we've made is that we've shifted the vast majority of our driving to our EV, partially for environmental reasons but also because of high gas prices. Driving the EV is about 1/5 as expensive per mile compared to our ICE car.
Last edited by Afty on Tue Nov 16, 2021 4:09 pm, edited 1 time in total.
MAKsdad
Posts: 284
Joined: Wed Mar 17, 2021 7:43 am

Re: How has inflation changed your expense/spending strategy?

Post by MAKsdad »

JackoC wrote: Tue Nov 16, 2021 3:31 pm A lot of apparent pride in 'absolutely positively no change'. I find that a little puzzling on a forum with so much discussion of minor savings by so many cheapskates (an accusation often hurled at me in real life though I'm more profligate relatively speaking here). Relative changes in the prices of goods I'd expect to generate more of that.

-snip-

Similarly if eg. the natural gas price in the heating bill goes up 50% (wholesale nat gas has gone up more, don't know what will flow through in the utility bill) I don't see why it would necessarily have 0% impact on where I set the thermostat program. Not a huge impact, but I don't see why our reaction to the biggest price increases would necessarily be zero.
I guess from my perspective, the benefit of being (somewhat) frugal and living below your means is that you can absorb inflation without negatively impacting your lifestyle. If you're spending everything you make, inflation becomes an exercise in cutting things to make budget. If you live below your means, inflation just eats slightly into your annual savings, and your quality of life can remain unchanged. THat's how I look at it at least.

I certainly won't be changing where I set my thermostat, regardless of the cost of utilities. I certainly won't buy foods I don't enjoy just because they're cheaper. I certainly won't drive less just because gas is more expensive. I have a cushion in terms of take home vs. expenses. If my savings are less this year than in the past, so be it.
User avatar
HomerJ
Posts: 17870
Joined: Fri Jun 06, 2008 12:50 pm

Re: How has inflation changed your expense/spending strategy?

Post by HomerJ »

sents13 wrote: Mon Nov 15, 2021 11:51 pm Inflation does not seem to want to go away anytime soon. Despite what the consensus was 6mths ago, the inflation effects are not "temporary".
Yawn. You can't predict the future.
Has that changed your expense/spending strategy?
Nope. Inflation has barely touched my life.

In fact, I guess it's good for me, because my ibonds that I've slowly built up over the past decade will get a nice bump this year, and my Social Security check will be larger in the future.

But if inflation continues and starts hitting stuff besides gas, and new and used cars, I guess it may affect me someday, and I will have to adjust.

6 months? No big deal. Remember, LAST year's inflation was low historically, like 1.6% for the entire year.

Did you start making plans around low inflation continuing forever back then?

https://data.bls.gov/timeseries/CUUR000 ... pct_12mths
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
flyingaway
Posts: 3639
Joined: Fri Jan 17, 2014 10:19 am

Re: How has inflation changed your expense/spending strategy?

Post by flyingaway »

I have been buying items marked for quick sales at grocery stores.
User avatar
AerialWombat
Posts: 2320
Joined: Tue May 29, 2018 1:07 pm
Location: Cash Canyon / Cashville

Re: How has inflation changed your expense/spending strategy?

Post by AerialWombat »

Price increases are directly causing me to look for a used outboard motor instead of a new one.

Other than that, no changes so far.
For entertainment purposes only.
Post Reply