How has inflation changed your expense/spending strategy?

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

Post by BernardShakey »

H-Town wrote: Tue Nov 16, 2021 11:11 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". 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.
Do you expect car prices to come down ? Serious question. It would seem to me they have gone up and will continue to go up, albeit maybe at a slower pace. But come down (as implied in your post), not sure about that. Interested in yours and others' thoughts on this.
An important key to investing is having a well-calibrated sense of your future regret.
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willthrill81
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Re: How has inflation changed your expense/spending strategy?

Post by willthrill81 »

BernardShakey wrote: Sat Nov 20, 2021 5:29 pm
H-Town wrote: Tue Nov 16, 2021 11:11 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". 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.
Do you expect car prices to come down ? Serious question. It would seem to me they have gone up and will continue to go up, albeit maybe at a slower pace. But come down (as implied in your post), not sure about that. Interested in yours and others' thoughts on this.
Deflation of most prices seems very unlikely to me with the exception of energy.
“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
lazynovice
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Re: How has inflation changed your expense/spending strategy?

Post by lazynovice »

BernardShakey wrote: Sat Nov 20, 2021 5:29 pm
H-Town wrote: Tue Nov 16, 2021 11:11 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". 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.
Do you expect car prices to come down ? Serious question. It would seem to me they have gone up and will continue to go up, albeit maybe at a slower pace. But come down (as implied in your post), not sure about that. Interested in yours and others' thoughts on this.
They’ve come down before. No one can predict the future.

https://www.in2013dollars.com/New-cars/ ... ount=15000
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jebmke
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Re: How has inflation changed your expense/spending strategy?

Post by jebmke »

lazynovice wrote: Sat Nov 20, 2021 6:25 pm
They’ve come down before. No one can predict the future.

https://www.in2013dollars.com/New-cars/ ... ount=15000
The global auto industry has a long history of boom and bust.
When you discover that you are riding a dead horse, the best strategy is to dismount.
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ram
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Re: How has inflation changed your expense/spending strategy?

Post by ram »

Have delayed buying of 3rd car.
3rd car is a want, not a need.
Ram
cbs2002
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Re: How has inflation changed your expense/spending strategy?

Post by cbs2002 »

It has not. The only changes I made are not buying something out of annoyance at the price, rather than because I can’t. Restaurant food prices is where I’ve noticed it the most, though those workers are also getting paid a lot more where I am so that’s a good thing in my book. For people whose budget is highly sensitive to food and fuel prices though, it is a different story and that story is no doubt more common than mine.

I will say inflation is one more reason I appreciate being with a spouse who also does not care about getting new stuff often. That’s a point of tension I never have to think about.
H-Town
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Re: How has inflation changed your expense/spending strategy?

Post by H-Town »

BernardShakey wrote: Sat Nov 20, 2021 5:29 pm
H-Town wrote: Tue Nov 16, 2021 11:11 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". 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.
Do you expect car prices to come down ? Serious question. It would seem to me they have gone up and will continue to go up, albeit maybe at a slower pace. But come down (as implied in your post), not sure about that. Interested in yours and others' thoughts on this.
I don’t expect the new car price would go down. But if there is a surplus of supply and lack of demand, one can find a great deal in used car market. This supports by 3-year lease, fleet, and American consumerism.

In addition, any additional year I get with my old car, I would save money in terms of purchases price divided by years of ownership. So when money is not going to a new car, it would be automatically contributed to taxable account (VTI, etc.). It’s not a direct way to fight inflation (is there a way?), but it gives me much more wealth to buy things I want later.
Time is the ultimate currency. My ultimate wealth is the full control of how I spend my time.
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billyo44
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Re: How has inflation changed your expense/spending strategy?

Post by billyo44 »

Makes me wonder…does a person really need to eat red meat @ these exorbitant prices….ah…..no!
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Fat-Tailed Contagion
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Re: How has inflation changed your expense/spending strategy?

Post by Fat-Tailed Contagion »

Eating less food.

Driving car less.
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boogiehead
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Re: How has inflation changed your expense/spending strategy?

Post by boogiehead »

No longer "outsource" services that I can do myself as they all have increased in terms of percentages anywhere from (20%-50% in my area) including: haircuts, carwashes, house cleaning, more cooking and less dining out (if dining out, we do takeout more often now), and if something non-consumable is on sale with a good price now I would tend to buy more since my expectation is the next time I buy it, the price will either have gone up or there will be shrinkflation.
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dmcmahon
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Re: How has inflation changed your expense/spending strategy?

Post by dmcmahon »

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’ve been buying durable goods whenever I can at today’s prices. Think you’ll need a new car in the next 18 months? TV? Roof? I’m buying it now. JMHO.
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Metsfan91
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Re: How has inflation changed your expense/spending strategy?

Post by Metsfan91 »

Nope, no it hasn't changed spending strategy. Buy essential items as needed as usual. Buy non-essential items on sale regardless of inflation/deflation.
"Know what you own, and know why you own it." — Peter Lynch
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Devil's Advocate
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Re: How has inflation changed your expense/spending strategy?

Post by Devil's Advocate »

andypanda wrote: Sat Nov 20, 2021 10:56 am Inflation hasn't changed our plans, but I don't feel as much pain about spending the cash I received when I sold my house last year.

I've already paid off my new wife's old house - $129k - and don't want as much cash sitting around with inflation picking up. And no, I'm 71 and not buying any more stock with cash. We already have enough for 10 or 20 years each in a nursing home in the taxable account.

We have made a deposit to get on the waiting list for March for 2 new composite decks and a new back stoop and steps to the rear entrance. We have French doors so it's a wide entry with 4 steps, black aluminum railings, etc.

We are about to sign a contract to have 2 full bathrooms torn out and reconfigured. The house was built in 1995 and needs some work. We'll also have the floor replaced in one bedroom, a new light installed in the front yard and some outlets moved in the den/aka former 2-car garage with raised floor, matching windows, etc. that was done in 2007.

Let's see, we just this week had the dual-pane glass replaced in 7 sashes because of fogging. The company went out of business in '05 or I would have simply bought new sashes. $240 per 31" x 33" sash fwiw. We like the narrow wood frames and didn't like the look of any of the replacement windows.

We'd move, but then we'd have to clean out the 3-car garage with walkup attic storage. We looked, but there aren't many two acre lots surrounded by woods.

We'll see if there's enough left for a larger second boat. Maybe a 22- or 23-foot center console river or bay boat. :)

I love cash, but experienced what happened to it in the '70s and '80s. It wasn't pretty. It was half the reason I bought my old dilapidated brick house on the fringe of a downtown historic district in 1980. It's in the historic district now and in a better school zone, too.

My wife has gone shopping for the grandsons' new shoes and left me home alone to watch the two-day-old 65" LG C1. It's quite an improvement over her 40" 2006 Bravia. I may need to move the sofa back a little - maybe to 7.5 or 8 feet.

In other news, SunTrust refused to pay a bogus credit card charge this morning. They figured I didn't charge $4959.00 at the Jamaica Customs Department. :) :) :)
I've already paid off my new wife's old house
Better than paying the old wife's new house off!!

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

Post by reln »

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.
Sounds silly.
mary1492
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Re: How has inflation changed your expense/spending strategy?

Post by mary1492 »

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.
Certainly a personal view of the future is important to leading to how any individual will address the situation, if at all.

If you have the means to stock up, like a large home/pantry/basement/garage and/or freezer, I would think you already do stock up to some extent. As far as going beyond what someone already does, I don't believe it will make a huge difference in the bigger scheme of things. I believe that the place to seriously address the potential issue is with big ticket items which are discretionary. For example, put off the new car purchase and make your current car last another couple years. This is a big one as car prices have jumped significantly this year. Additionally, when purchasing a new car, most often insurance rates will go up as well initially for having a new/expensive car. So there you have a double whammy with a big ticket item. I would say similarly with a home purchase, but there are more parameters involved there.

Will stocking up on food and consumables really save you that much? Ask yourself how much you're considering stockpiling? Maybe $1000 or $2000 worth? And what do you anticipate annual inflation to be, maybe 10% on the high side? So you're going to save $100 or $200 for the coming year. That doesn't do it for me.

However, again, if you're already doing this as part of your normal routine, you already get the benefits.
mary1492
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Re: How has inflation changed your expense/spending strategy?

Post by mary1492 »

BernardShakey wrote: Sat Nov 20, 2021 5:29 pm
H-Town wrote: Tue Nov 16, 2021 11:11 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". 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.
Do you expect car prices to come down ? Serious question. It would seem to me they have gone up and will continue to go up, albeit maybe at a slower pace. But come down (as implied in your post), not sure about that. Interested in yours and others' thoughts on this.
Serious answer - it depends. How are wages tracking with car prices? What happens at the low end of the market? Those subprime buyers who really cannot afford the new car, but somehow get financing and are able to pay it for the first year before having it repossessed? The auto market is competitive. Many/most folks will make a purchase decision on the final price. I believe that most folks have a couple alternatives regarding what they end out buying where price is an important factor. As a result of being competitive, auto prices will remain high only to the point which demand outstrips supply and the auto manufacturers are profitable. The moment demand pulls back, the dealer lots begin to fill up again, some of the manufacturers post losses, they will lower prices to be more competitive and sell more cars.

Personally, I believe the current situation is "temporary" - meaning maybe it will last another year or two.
iamfarmerted
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Re: How has inflation changed your expense/spending strategy?

Post by iamfarmerted »

Mostly stocking up on shelf stable inputs for small business as prices are up on various items approx 4-20%. Utilities are the real doozy..turn the thermostat down and wear a sweater.
tibbitts
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Re: How has inflation changed your expense/spending strategy?

Post by tibbitts »

I just now gave in and applied for another reward card with a promotion, because it offers a recurring higher-percent spend category for which none of my existing cards ever applies. So I thought I might claw back a few dollars from that category, in which a provider has just announced a price increase. I reasoned the new card might arrive barely in time so I could meet the $1k spend for the opening bonus with a one-time $1.2k bill that's coming up. And then I found out the issuer only giving me a $500 credit limit.
fortunefavored
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Re: How has inflation changed your expense/spending strategy?

Post by fortunefavored »

mary1492 wrote: Sun Nov 21, 2021 6:33 am
BernardShakey wrote: Sat Nov 20, 2021 5:29 pm Do you expect car prices to come down ? Serious question. It would seem to me they have gone up and will continue to go up, albeit maybe at a slower pace. But come down (as implied in your post), not sure about that. Interested in yours and others' thoughts on this.
Serious answer - it depends. How are wages tracking with car prices? What happens at the low end of the market? Those subprime buyers who really cannot afford the new car, but somehow get financing and are able to pay it for the first year before having it repossessed? The auto market is competitive. Many/most folks will make a purchase decision on the final price. I believe that most folks have a couple alternatives regarding what they end out buying where price is an important factor. As a result of being competitive, auto prices will remain high only to the point which demand outstrips supply and the auto manufacturers are profitable. The moment demand pulls back, the dealer lots begin to fill up again, some of the manufacturers post losses, they will lower prices to be more competitive and sell more cars.

Personally, I believe the current situation is "temporary" - meaning maybe it will last another year or two.
MSRP for new cars hasn't moved up a bunch, and those are probably sticky.. but what you currently see is crazy dealer mark-ups/add-ons and fewer rebates. I think the latter will abate. That is straight up supply related, there just aren't enough cars. Not related to supply inputs (energy/shipping/etc.)
Ivygirl
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Re: How has inflation changed your expense/spending strategy?

Post by Ivygirl »

mary1492 wrote: Sun Nov 21, 2021 6:18 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". 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.
Certainly a personal view of the future is important to leading to how any individual will address the situation, if at all.

If you have the means to stock up, like a large home/pantry/basement/garage and/or freezer, I would think you already do stock up to some extent. As far as going beyond what someone already does, I don't believe it will make a huge difference in the bigger scheme of things. I believe that the place to seriously address the potential issue is with big ticket items which are discretionary. For example, put off the new car purchase and make your current car last another couple years. This is a big one as car prices have jumped significantly this year. Additionally, when purchasing a new car, most often insurance rates will go up as well initially for having a new/expensive car. So there you have a double whammy with a big ticket item. I would say similarly with a home purchase, but there are more parameters involved there.

Will stocking up on food and consumables really save you that much? Ask yourself how much you're considering stockpiling? Maybe $1000 or $2000 worth? And what do you anticipate annual inflation to be, maybe 10% on the high side? So you're going to save $100 or $200 for the coming year. That doesn't do it for me.

However, again, if you're already doing this as part of your normal routine, you already get the benefits.
I regard stocking up on food and consumables as a "one-percenter." If I can "up my game" it is pure profit which helps offset inflation. Naturally having to think constantly about little things is annoying and I'd rather not, but now considering inflation if I want to retire I will have to.

It does matter. I use a laundromat. Inflation has spurred me to wash enough delicate things in the sink and hang them to dry that I can use the washer that costs $4.50 rather than $6.00. Also the dryer costs 25 cents for 7-10 minutes (depending on heat used). If I hang my damp clothes around the house for a day I can save 50 cents per load. A weekly laundry day now costs $10.50 rather than $14.50. That's $16 saved per month, $208 per year of 52 weeks. Six months of my car insurance is $232 for comparison.

Same for food and consumables. If I buy 10 pounds of hamburger and it goes from $3.50 a pound to $4.50 a pound (which recently happened), I saved not just $10 but $10.84 because I didn't pay sales tax on the $10. Not to mention sometimes there isn't any hamburger (which recently almost happened - there were 2 pounds available I think).

This could be the difference between being able to fully fund my IRA this year, or not. I dislike scraping and saving like this, but I can see that it matters so I do it.
Wannaretireearly
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Re: How has inflation changed your expense/spending strategy?

Post by Wannaretireearly »

First $80 gas tank fill up spurred a discussion with my son.
He actively believes we spend beyond our means and I’m fine with that, I think.
Will not stop us from taking a road trip. I think if gas prices went up another 50% it would materially affect how much we drive.

Grocery prices have gone thru the roof.
I would feel more nervous without a regular income stream.
Which begs the question of how to factor inflation properly into retirement target numbers…
Death and taxes. Only one is under your control!
mary1492
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Re: How has inflation changed your expense/spending strategy?

Post by mary1492 »

Ivygirl wrote: Sun Nov 21, 2021 9:37 am
mary1492 wrote: Sun Nov 21, 2021 6:18 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". 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.
Certainly a personal view of the future is important to leading to how any individual will address the situation, if at all.

If you have the means to stock up, like a large home/pantry/basement/garage and/or freezer, I would think you already do stock up to some extent. As far as going beyond what someone already does, I don't believe it will make a huge difference in the bigger scheme of things. I believe that the place to seriously address the potential issue is with big ticket items which are discretionary. For example, put off the new car purchase and make your current car last another couple years. This is a big one as car prices have jumped significantly this year. Additionally, when purchasing a new car, most often insurance rates will go up as well initially for having a new/expensive car. So there you have a double whammy with a big ticket item. I would say similarly with a home purchase, but there are more parameters involved there.

Will stocking up on food and consumables really save you that much? Ask yourself how much you're considering stockpiling? Maybe $1000 or $2000 worth? And what do you anticipate annual inflation to be, maybe 10% on the high side? So you're going to save $100 or $200 for the coming year. That doesn't do it for me.

However, again, if you're already doing this as part of your normal routine, you already get the benefits.
I regard stocking up on food and consumables as a "one-percenter." If I can "up my game" it is pure profit which helps offset inflation. Naturally having to think constantly about little things is annoying and I'd rather not, but now considering inflation if I want to retire I will have to.

It does matter. I use a laundromat. Inflation has spurred me to wash enough delicate things in the sink and hang them to dry that I can use the washer that costs $4.50 rather than $6.00. Also the dryer costs 25 cents for 7-10 minutes (depending on heat used). If I hang my damp clothes around the house for a day I can save 50 cents per load. A weekly laundry day now costs $10.50 rather than $14.50. That's $16 saved per month, $208 per year of 52 weeks. Six months of my car insurance is $232 for comparison.

Same for food and consumables. If I buy 10 pounds of hamburger and it goes from $3.50 a pound to $4.50 a pound (which recently happened), I saved not just $10 but $10.84 because I didn't pay sales tax on the $10. Not to mention sometimes there isn't any hamburger (which recently almost happened - there were 2 pounds available I think).

This could be the difference between being able to fully fund my IRA this year, or not. I dislike scraping and saving like this, but I can see that it matters so I do it.
That's great! Hopefully the better buying habits will remain as pricing pressures (hopefully) ease - you could supercharge your savings. It always pays to be a "better" consumer.

I still believe that most folks who have the means to stock up do already do it as part of their normal routine. If you have a fully loaded freezer in the garage or basement, clearly you have it for a reason, no?
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snackdog
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Re: How has inflation changed your expense/spending strategy?

Post by snackdog »

Inflation has caused us to spend more on gasoline, food, and other goods. It has caused us to delay vehicle and other large equipment purchases since those are not urgent.
andypanda
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Re: How has inflation changed your expense/spending strategy?

Post by andypanda »

"Better than paying the old wife's new house off!!"

Amen and Hallelujah to that !!
Ivygirl
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Re: How has inflation changed your expense/spending strategy?

Post by Ivygirl »

mary1492 wrote: Sun Nov 21, 2021 9:52 am
Ivygirl wrote: Sun Nov 21, 2021 9:37 am
mary1492 wrote: Sun Nov 21, 2021 6:18 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". 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.
Certainly a personal view of the future is important to leading to how any individual will address the situation, if at all.

If you have the means to stock up, like a large home/pantry/basement/garage and/or freezer, I would think you already do stock up to some extent. As far as going beyond what someone already does, I don't believe it will make a huge difference in the bigger scheme of things. I believe that the place to seriously address the potential issue is with big ticket items which are discretionary. For example, put off the new car purchase and make your current car last another couple years. This is a big one as car prices have jumped significantly this year. Additionally, when purchasing a new car, most often insurance rates will go up as well initially for having a new/expensive car. So there you have a double whammy with a big ticket item. I would say similarly with a home purchase, but there are more parameters involved there.

Will stocking up on food and consumables really save you that much? Ask yourself how much you're considering stockpiling? Maybe $1000 or $2000 worth? And what do you anticipate annual inflation to be, maybe 10% on the high side? So you're going to save $100 or $200 for the coming year. That doesn't do it for me.

However, again, if you're already doing this as part of your normal routine, you already get the benefits.
I regard stocking up on food and consumables as a "one-percenter." If I can "up my game" it is pure profit which helps offset inflation. Naturally having to think constantly about little things is annoying and I'd rather not, but now considering inflation if I want to retire I will have to.

It does matter. I use a laundromat. Inflation has spurred me to wash enough delicate things in the sink and hang them to dry that I can use the washer that costs $4.50 rather than $6.00. Also the dryer costs 25 cents for 7-10 minutes (depending on heat used). If I hang my damp clothes around the house for a day I can save 50 cents per load. A weekly laundry day now costs $10.50 rather than $14.50. That's $16 saved per month, $208 per year of 52 weeks. Six months of my car insurance is $232 for comparison.

Same for food and consumables. If I buy 10 pounds of hamburger and it goes from $3.50 a pound to $4.50 a pound (which recently happened), I saved not just $10 but $10.84 because I didn't pay sales tax on the $10. Not to mention sometimes there isn't any hamburger (which recently almost happened - there were 2 pounds available I think).

This could be the difference between being able to fully fund my IRA this year, or not. I dislike scraping and saving like this, but I can see that it matters so I do it.
That's great! Hopefully the better buying habits will remain as pricing pressures (hopefully) ease - you could supercharge your savings. It always pays to be a "better" consumer.

I still believe that most folks who have the means to stock up do already do it as part of their normal routine. If you have a fully loaded freezer in the garage or basement, clearly you have it for a reason, no?
It doesn't feel great. It feels like poverty. :annoyed Stupid inflation.
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Re: How has inflation changed your expense/spending strategy?

Post by hank-johnson »

Couple of points, (1) inflation is very local and (2) the CPI stats aren’t necessarily going to be indicative of increases in your core personal expenditures. Sure, our grocery bill is probably about 10% higher now than a year ago, however, our total expenditures are still down quite a bit - refinancing reduced our mortgage payment, still working remotely so less overall gas and car maintenance expenditures, and our heating bills seem to be oscillating in their normal range. If you have a large one-off expense (e.g., car, home improvement) then I imagine the inflation sting is a bit worse, but so far my household hasn’t been affected and our consumption patterns haven’t changed.
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Re: How has inflation changed your expense/spending strategy?

Post by mary1492 »

Ivygirl wrote: Sun Nov 21, 2021 10:06 am It doesn't feel great. It feels like poverty. :annoyed Stupid inflation.
Understood.

I don't believe that it will be at such a high level over the longer term. How did you feel in March 2020 as the equity markets cratered? Pretty crappy. I think we're at a similar point. Much of the inflation we're seeing is a result of recent events. In time, materials shortages will abate. Commodity prices will come back down. Prices to consumers will ultimately come down as well. If not, there will need to be more handouts, because many are feeling the impacts of inflation at this time.
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Re: How has inflation changed your expense/spending strategy?

Post by OrangeKiwi »

H-Town wrote: Tue Nov 16, 2021 11:11 am
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.
In WA, I see minimum 5% increases even at a budget grocer like Winco (they do not even accept credit cards, so their prices are pretty much as low as it goes). All the candy went from $0.88 to $1.22 a few months ago. Restaurants are easily +10% if not 20% more expensive. It is very common to see signs saying menu prices increased due to increase in the restaurant's costs.
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Re: How has inflation changed your expense/spending strategy?

Post by lazynovice »

With service industry wages moving to a living wage in most places, I wonder if the American concoct of gratuities will change. In the past, restaurant workers were paid below minimum wage and made up the difference in tips. How long before that adjusts now that wages have crept up?
“I didn’t want my sailboat to be in the driveway when I died.” Nomadland
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Re: How has inflation changed your expense/spending strategy?

Post by brian91480 »

JackoC wrote: Tue Nov 16, 2021 3:31 pm 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.
This exact thing happened to me the past 2 winters (not inflation related, but a utility company error. I posted on this forum last year about my experience dealing with this issue)

The elevated utility costs absolutely impacted how I heated my home. I kept things much colder in the winter than I would have if I had a reasonable bill!

Anyone who disputes this phenomenon is either insanely wealthy, so they don't care... or... they've never experienced the situation for themselves, and they're incorrectly assuming how they would react.

Obviously we're not talking about a 5% increase having this psychological impact. My experience ranged 50% - 100% higher than expected cost. I could afford the higher bill, but I couldn't let myself heat the home as much as I wanted, due to the psychology of the elevated costs.

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

Post by GeraniumLover »

I've stopped buying bacon
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Re: How has inflation changed your expense/spending strategy?

Post by JoeRetire »

lazynovice wrote: Sun Nov 21, 2021 10:59 am With service industry wages moving to a living wage in most places, I wonder if the American concoct of gratuities will change. In the past, restaurant workers were paid below minimum wage and made up the difference in tips. How long before that adjusts now that wages have crept up?
I don't believe restaurant servers are making minimum wage in my area yet. I'm not expecting that to change anytime soon.

https://www.dol.gov/agencies/whd/state/ ... age/tipped
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Re: How has inflation changed your expense/spending strategy?

Post by JoeRetire »

GeraniumLover wrote: Sun Nov 21, 2021 11:16 am I've stopped buying bacon
:shock:
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Re: How has inflation changed your expense/spending strategy?

Post by fortunefavored »

GeraniumLover wrote: Sun Nov 21, 2021 11:16 am I've stopped buying bacon
Actionable: cutting out bacon and red meat might make you live longer, so you'll need to save more money for retirement! Good news/bad news!
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Re: How has inflation changed your expense/spending strategy?

Post by lazynovice »

JoeRetire wrote: Sun Nov 21, 2021 11:20 am
lazynovice wrote: Sun Nov 21, 2021 10:59 am With service industry wages moving to a living wage in most places, I wonder if the American concoct of gratuities will change. In the past, restaurant workers were paid below minimum wage and made up the difference in tips. How long before that adjusts now that wages have crept up?
I don't believe restaurant servers are making minimum wage in my area yet. I'm not expecting that to change anytime soon.

https://www.dol.gov/agencies/whd/state/ ... age/tipped
I think that chart is what the state requires not what servers are being paid? In my area, restaurants who aren’t paying are closing for the slower meals. But I don’t know what a restaurant is paying, so I am still tipping the same way I always have.
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Re: How has inflation changed your expense/spending strategy?

Post by JoeRetire »

lazynovice wrote: Sun Nov 21, 2021 11:33 am
JoeRetire wrote: Sun Nov 21, 2021 11:20 am
lazynovice wrote: Sun Nov 21, 2021 10:59 am With service industry wages moving to a living wage in most places, I wonder if the American concoct of gratuities will change. In the past, restaurant workers were paid below minimum wage and made up the difference in tips. How long before that adjusts now that wages have crept up?
I don't believe restaurant servers are making minimum wage in my area yet. I'm not expecting that to change anytime soon.

https://www.dol.gov/agencies/whd/state/ ... age/tipped
I think that chart is what the state requires not what servers are being paid? In my area, restaurants who aren’t paying are closing for the slower meals. But I don’t know what a restaurant is paying, so I am still tipping the same way I always have.
I do know what the local restaurants are paying in my area. And I know how many restaurants are looking for help, and how hard the servers are actually working. In my area, some restaurants are reducing their days/hours due to lack of help.

I tip more than I used to.
I love a good nap. Sometimes it’s the only thing getting me out of bed in the morning.
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Re: How has inflation changed your expense/spending strategy?

Post by JackoC »

brian91480 wrote: Sun Nov 21, 2021 11:04 am
JackoC wrote: Tue Nov 16, 2021 3:31 pm 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.
This exact thing happened to me the past 2 winters (not inflation related, but a utility company error. I posted on this forum last year about my experience dealing with this issue)

The elevated utility costs absolutely impacted how I heated my home. I kept things much colder in the winter than I would have if I had a reasonable bill!

Anyone who disputes this phenomenon is either insanely wealthy, so they don't care... or... they've never experienced the situation for themselves, and they're incorrectly assuming how they would react.

Obviously we're not talking about a 5% increase having this psychological impact. My experience ranged 50% - 100% higher than expected cost. I could afford the higher bill, but I couldn't let myself heat the home as much as I wanted, due to the psychology of the elevated costs.
Of course. It's basic rational economic behavior to shift consumption among goods/services as their relative prices change. And higher inflation (which is properly defined as the overall increase in the price level) tends to be accompanied by sharper relative price changes among items. Insisting one's consumption pattern would be unchanged by a real world inflation (which is virtually never 'everything went up by 2% last year, oh now everything will go up 6%!) is likely driven IMO by underlying beliefs not directly related to economics, or else as you say could be absolute indifference to living costs. The latter is possible but my guess is former is an element in 'my spending pattern hasn't changed *one iota*!' type responses.
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Re: How has inflation changed your expense/spending strategy?

Post by 9-5 Suited »

I have actually found this period of time to teach a somewhat positive lesson. Inflation (obviously not talking about hyperinflation, just your run of the mill above average kind) is actually pretty easy to fend off with very modest life impact. Here are some things we've done to keep our expenses pretty much flat despite rising costs:

- Walk a few more places instead of taking the train/bus
- Make coffee at home a few extra days a month
- Go out to eat either a few times a month less or at slightly less expensive restaurants
- Stay at hotels that are a touch cheaper and spend a little more time looking for deals on flights, rental cars, and such

Don't even notice inflation really, if I'm being honest, because it's been much easier than expected to adjust to. I wouldn't call the above items big sacrifices. I'm sure YMMV and some people will not be able to make accommodations on their major costs, but I know many can. And many other expenses are subject to the same kinds of simple "downgrades" without major impact.
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Re: How has inflation changed your expense/spending strategy?

Post by Broken Man 1999 »

billyo44 wrote: Sat Nov 20, 2021 8:27 pm Makes me wonder…does a person really need to eat red meat @ these exorbitant prices….ah…..no!
Eating red meat has never been a need, it is a want. We have been eating less beef for years, but it is still consumed at our casa.

I still enjoy an aged steak every now and then.

Tonight I'll be scarfing down hot chicken wings.

Tomorrow I'll have my one serving of turkey for the year. Ugh, I have my father's dislike for turkey, my mother used to bake a chicken instead for Thanksgiving.

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

Post by Broken Man 1999 »

GeraniumLover wrote: Sun Nov 21, 2021 11:16 am I've stopped buying bacon
What?

That is a step way, way too far!

No can do!

Sure, one might live longer by not eating bacon, but who would want to do so? :D

Bacon Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go." - Mark Twain
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Re: How has inflation changed your expense/spending strategy?

Post by vitaflo »

Inflation isn't a problem. I upped my pay to compensate. Maybe if I was retired I'd be worried but as an accumulator I can increase my sweat equity to match whatever inflation throws at us.
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Re: How has inflation changed your expense/spending strategy?

Post by afr »

My income has dropped substantially since the pandemic. And at 61 yrs of age I’m looking to call it quits in about 5 more years. Me and my DW’s medical insurance is increasing $80/mo in January. Between ramped up retirement saving and extra principal payments to payoff mortgage prior to retirement, the only thing we’ve eliminated are making charitable contributions now or in the near future.
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Re: How has inflation changed your expense/spending strategy?

Post by flyingaway »

Broken Man 1999 wrote: Wed Nov 24, 2021 5:21 pm
GeraniumLover wrote: Sun Nov 21, 2021 11:16 am I've stopped buying bacon
What?

That is a step way, way too far!

No can do!

Sure, one might live longer by not eating bacon, but who would want to do so? :D

Bacon Man 1999
If you live longer by not eating bacon, that will put a pressure on your portfolio.
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Re: How has inflation changed your expense/spending strategy?

Post by afr »

My income has dropped substantially since the pandemic. And at 61 yrs of age I’m looking to call it quits in about 5 more years. Me and my DW’s medical insurance is increasing $80/mo in January. Between ramped up retirement saving and extra principal payments to payoff mortgage prior to retirement, the only thing we’ve eliminated is making charitable contributions now or in the near future.
Last edited by afr on Fri Nov 26, 2021 6:36 am, edited 1 time in total.
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Re: How has inflation changed your expense/spending strategy?

Post by willthrill81 »

Broken Man 1999 wrote: Wed Nov 24, 2021 5:21 pm
GeraniumLover wrote: Sun Nov 21, 2021 11:16 am I've stopped buying bacon
What?

That is a step way, way too far!

No can do!

Sure, one might live longer by not eating bacon, but who would want to do so? :D

Bacon Man 1999
I'm not sure that any studies have linked bacon consumption to longevity. But I know that it's positively correlated with my own happiness and meets all the criteria for a causal relationship. :mrgreen:
“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
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Re: How has inflation changed your expense/spending strategy?

Post by Base Hit »

I bought a hybrid car 2 years ago, so gasoline prices don’t concern me at all. But inflation has prompted me to “buy things now” before they go up.
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Re: How has inflation changed your expense/spending strategy?

Post by lazynovice »

willthrill81 wrote: Thu Nov 25, 2021 9:21 pm
Broken Man 1999 wrote: Wed Nov 24, 2021 5:21 pm
GeraniumLover wrote: Sun Nov 21, 2021 11:16 am I've stopped buying bacon
What?

That is a step way, way too far!

No can do!

Sure, one might live longer by not eating bacon, but who would want to do so? :D

Bacon Man 1999
I'm not sure that any studies have linked bacon consumption to longevity. But I know that it's positively correlated with my own happiness and meets all the criteria for a causal relationship. :mrgreen:
My grandmother would always remind me she made it 91 years eating bacon everyday. Of course she also never touched alcohol, so there’s that.
“I didn’t want my sailboat to be in the driveway when I died.” Nomadland
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Re: How has inflation changed your expense/spending strategy?

Post by willthrill81 »

lazynovice wrote: Fri Nov 26, 2021 11:31 am
willthrill81 wrote: Thu Nov 25, 2021 9:21 pm
Broken Man 1999 wrote: Wed Nov 24, 2021 5:21 pm
GeraniumLover wrote: Sun Nov 21, 2021 11:16 am I've stopped buying bacon
What?

That is a step way, way too far!

No can do!

Sure, one might live longer by not eating bacon, but who would want to do so? :D

Bacon Man 1999
I'm not sure that any studies have linked bacon consumption to longevity. But I know that it's positively correlated with my own happiness and meets all the criteria for a causal relationship. :mrgreen:
My grandmother would always remind me she made it 91 years eating bacon everyday. Of course she also never touched alcohol, so there’s that.
One of my great-grandfathers did basically the same. He ate biscuits made with lard and bacon with fatback every morning for 93 years. Of course, he also worked very hard all his life. He kept a 40 acre 'garden' (his own words) right up until he died.
“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
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Re: How has inflation changed your expense/spending strategy?

Post by IMO »

There's really no escaping inflation, even if you are able to defer it immediately effecting you. Sometimes it obvious and other times it's stealthy.

Here's a real example in our life:

Have a few cars, one being old enough with high mileage that every tank fill up is a risk that that money will be lost :D.

I like driving that car around town putting the miles on that car to wear that car out since once it's dead, we are planning to replace it with a new vehicle. With the price of new cars nowadays, I've switched to not putting as many miles on the old beater because I want it to last now as long as possible. Instead, will take our newer vehicle and put miles on the newer one instead. Inflation has hit new cars hard, but I'm hoping that prices will drip down some if we can wait 1 year or longer. Don't expect any great deals on new cars in a year+, but hopefully they will drop down some. So we are not escaping inflation in this scenario, just trying to defer it with the hope that some of it may decline some what for a vehicle.

Out of curiosity, on my spouse's newer vehicle, we took up some local dealers on getting an offer for her vehicle in the thought of trading it up to a brand new vehicle. I mean, everyone's talking about the great prices you get for a late model used car. And we did get a great offer on the used car from the dealer for a few grand above what we thought. Problem was when you looked at the new vehicle offer, it was not just for a few grand above MSRP, it was for a few grand PLUS a few grand. No win there (kind of like when your house goes up in value but then you have to move and buy another house that's gone up by at least as much).

We've also cut down on travel because of costs. We've seen increases of up to 100% increases from hotels we've stayed at before and car rental prices up similar amounts. There are times when we've said screw that, lets not go now, maybe it will drop some in the future (it won't back to baseline).

I think the typical answer on this site is just be wealthy enough that inflation increases don't change what/how you spend money on. If you drop your spending in response, you are effectively lowering your standard of living. I do find that attitude a bit of out of touch with how many in society who are not as wealthy and I think inflation hits many people outside of this site much harder. Inflation has a variety of effects in our extended family, from elders on fixed incomes to children that will soon need to enter the workforce. I try to look beyond myself on the topic.

Edit to add: Regarding stocking up now vs. buying as you need it. Sounds reasonable, but then again, things like increases in Social Security and other COLA adjusted changes to pensions/salaries are lag real costs and for most don't take effect until Jan 1st. So for example, I can stock up on $100 worth of goods now with income I have now. Come Jan 1st, the income to buy that $100 of goods is now COLA adjusted to approx $106. The question being, should I buy now with deflated income dollars or wait for in COLA'd dollars? Depends if the goods are expected to goo up beyond the my COLA increase in income. It is complicated, so for example the largest employer in the country (Federal Civilians and Military) as typical will get COLA increases, but not to the level of the CPI. And inflation is variable depending on what your stocking up on.
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