How Do You Keep Up With Inflation?

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floridacatlover
Posts: 4697
Joined: Fri Aug 28, 2015 7:21 am

Re: How Do You Keep Up With Inflation?

Post by floridacatlover »

HappyDaze wrote:
Sat Jan 23, 2021 6:18 am
UGHHHHH...after doing a lot of research and crunching my numbers, I reduced my retirement contribution by a couple of percentage points. "They" say - it's better if you have debt to aggressively pay off the debt and THEN increase your retirement contributions - so I'm sticking with that.

I'm comfortable with what I'm contributing and my employer is generously contributing - so it's okay. When/if we finally get our pay increase in the spring, I will likely increase it again - which is what I usually do when I get a pay increase.
I think you are smart to focus on debt. The number you cited in an earlier post about your employer’s contribution, 7%, is fantastic and as long as you keep your own contribution high enough to get that match I think you are good. Keep in my that all of the money you put in your retirement account will be taxable when you withdraw it. My guess is that taxes are going to increase over the next decade.

Maybe when you feel comfortable contributing more to retirement, look into a Roth IRA. You pay taxes on that money now but it is tax free when you withdraw it. I’m happy that I have savings/investments outside my 401k retirement account so that I can adjust my taxable withdrawals. Just an idea for you. You are doing great already.

HappyDaze
Posts: 1469
Joined: Tue Oct 15, 2019 11:11 am

Re: How Do You Keep Up With Inflation?

Post by HappyDaze »

floridacatlover wrote:
Sat Jan 23, 2021 9:59 am
I think you are smart to focus on debt. The number you cited in an earlier post about your employer’s contribution, 7%, is fantastic and as long as you keep your own contribution high enough to get that match I think you are good. Keep in my that all of the money you put in your retirement account will be taxable when you withdraw it. My guess is that taxes are going to increase over the next decade.

Maybe when you feel comfortable contributing more to retirement, look into a Roth IRA. You pay taxes on that money now but it is tax free when you withdraw it. I’m happy that I have savings/investments outside my 401k retirement account so that I can adjust my taxable withdrawals. Just an idea for you. You are doing great already.
Thank you Floridacat for the encouragement and the tip! I do have another iron in the fire via a whole life insurance policy that I purchased in my early 20's. Through some sort of class action lawsuit about 20 years ago, I no longer have to pay anything on the policy (I never did, my ex-husband did, it just keeps increasing in cash value. Ideally, that money will be there for my kiddos if something happens to me - but it's also there if I need some of it one day.

Beverley
Posts: 152
Joined: Fri Oct 09, 2020 11:33 am

Re: How Do You Keep Up With Inflation?

Post by Beverley »

I am also bringing up this thread several months later to see how we are all doing with this. I received notification from CalPers that Long Term Care insurance premiums are going to almost double over the next two years starting November. CalPers will also present some optional plans for us that in my case could be cheaper than what I have. But I am not sure I want to go that route yet because once you make cuts there is no going back. As it turns out I won't need the cuts. Right now my premium is $286.00 per month. It will will go up to $443.00 month. I started this policy when I was 55 and intend to stay with it. The plan I have covers home care, assisted living, nursing care. I do not want to wind up in a nursing home and I could because I do not expect my kids to take care of me. They struggle to take care of themselves.

So my total increase will be $277.00 per month. Here is what I have done to cover it (the pandemic and lockdowns helped).

1. Quit all of my wine clubs at a monthly average of $25.00 a month
2. Stopped winetastings saving about $25.00 a month
3. Gas savings about $25.00 a month
4. Stopped buying junk food saving about $50.00 a month
5. Stopped my Optavia food subscription saving about $165.00 a month
6. Quit buying many convenience type foods (for health reasons) saving about $25.00 a month

So a savings of about $315.00 a month.

Plus paying off my van $500.00 a month (to go towards maintenance costs on the house.)

I still have a few things I may cut:

1. Newspaper $35.00 a month
2. Disney $8.00 a month (unless I find we are using it)
3. May cut my Farm Fresh delivery to once a month saving $30.00 a month.

4. Internet cost for my tablet $20.00 a month. I probably won't do this since I have found i can take it to work and use it to read e-mails etc. during my down time at work thus freeing up time for me to do surveys at home.

Basically I have been going line by line on my credit card statements and slashing. Slash and burn as a former member on this forum used to call it.

I am feeling good about all of this. These are not things I will miss. My health has demanded I cut all of this so I am hoping that along with a healthier bank account I will start feeling better physically. Mainly I want to get rid of these bouts of fatigue.

Bev

floridacatlover
Posts: 4697
Joined: Fri Aug 28, 2015 7:21 am

Re: How Do You Keep Up With Inflation?

Post by floridacatlover »

I don’t really consider this due to inflation, but homeowners insurance is going through the roof here in coastal Florida. We have very little choice in insurance because all of the big name brand insurance companies left the state (or at least the coastal areas) starting fifteen years ago when we had four hurricanes back to back, none of which hit my area except as tropical storms, thankfully.

My homeowners insurance is due next month. I haven’t yet received the bill. Four insurance companies are dropping many policyholders right before hurricane season. Mine is not one of them but my insurer tops the list of money losers in Florida. Two years ago my bill was about $1500/year. Then it jumped to $2300 and last year $2800. They say that insurance is skyrocketing so I’m guessing my policy will be between $3500 and $4000. (Part of this in the increase in home values.)

Of course I also pay homeowner’s insurance on mom’s house. Actually in her area, closer to the Gulf, there is only one option, state-run Citizens (the insurer of “last resort”). But I “only” pay $1,700 on her house. That bill is due in January so I’ve already paid it.

I really have very few places to cut in my budget. I can afford it but still feel OUCH! thinking about it. Going over my budget I’ve stuck to it almost perfectly so far this year. I budget $100/month entertainment which includes NYT, Netflix, eating out with friends, etc. and feel that is needed for my sanity. I only average $150/month for food, lower than many of you. My two big costs are medical (Medicare part B and D, supplement and out of pocket costs, mostly Rx and dental) and, to a degree, Pippi. I’ve budgeted for the best possible scenario that Pippi will be with me all year but I am doubtful that will be the case.

I don’t know why but just seeing the big increase in salad prices at Wendy’s the other day made me stop and really think of being more careful. Also I’ve been looking at airfare and hotel prices and they are high. I was thinking of going to the U.S. figure skating championships in Nashville in January but the downtown hotel prices are outrageous. (I could visit London for less.) I really think that we are going to see more inflation than we’ve seen in a long time.

Beverley
Posts: 152
Joined: Fri Oct 09, 2020 11:33 am

Re: How Do You Keep Up With Inflation?

Post by Beverley »

I have kept some monthly entertainment items in my budget such as Netflix, Hulu and Amazon Prime. I like the perks that Prime offers so I pay that once a year at discounted price. I do subscribe to Sirius radio and as long as I can get a good subscription renewal via promotions I will keep that. I am not willing to pay $25.00 a month for it but will pay $5-$10. I don't drive enough to justify paying more than that. I will also pay for intermittent entertainment if the price is right and its something I want to do. My internet subscription is a little high but that includes my landline phone. I need that since it is tied to my Life Alert account.

Mostly I am working on trimming food costs. Tawra Kellerman (Living on a Dime) had a video last month where she pointed out food inflation has not been as bad as what people are saying. She lives in Colorado which is a fairly high COL area so I get what she is saying. However she does buy some unhealthy foods like white bread which I don't do. But I feel like I can reign in my food costs more. Somethings like my produce delivery subscriptions and Schwans I am keeping but I have cut my Schwans spending almost in half for now. Their foods are so good but so many are high in sodium so I am very limited in what I can eat.

Basically my high costs are utilities. They are ridiculous. I can control my gas and electricity which I do but several are fixed such as my phone, internet, trash pickup, sewer, water. Those costs creep up every year and there is nothing I can do.

Bev

HappyDaze
Posts: 1469
Joined: Tue Oct 15, 2019 11:11 am

Re: How Do You Keep Up With Inflation?

Post by HappyDaze »

I don't know where else I can cut, honestly. I could give up the internet if I had to - but I pretty much break even on that with the surveys I do. I don't have any subscriptions of any kind that I pay for - I was going to join a craft thing that someone here recommended for just a couple dollars a month - but I cancelled almost immediately. I had AARP that I paid $12 for - but not renewing.

I have found $30-ish more dollars a month in my budget since the thrift store closed - hmmmm...interesting...

I am staying out of the grocery store for longer periods of time, not caring so much if what I eat is "wonderful" and satisfying a craving - as long as it is healthy and fills me up.

I am going to talk with my landscaping company - they mow my lawn too much - sometimes twice a week. They can just STOP that - saving me $40 every time they DON'T do it.

Still on a NOTHING NEW plan for new clothing and shoes. If I find something for work at a yard sale, I'll consider it.

Entertainment budget is ZERO - I watch movies and such on Youtube, get books from the LIbrary, magazine subscriptions are all free. Hiking and walking are free and we have great places for those.

If push comes to shove, I can cancel my trash service and take my own garbage to the landfill again, saving $30 a month. My cell phone is paid ahead for almost a year - $120 for the whole year.

I can certainly improve on some things - I haven't been walking to work, grocery store, etc. like I should. Those little trips using the car are expensive and walking is better for me.

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