genuinely asking because i keep reading that inflation is temporary and the fed will cut rates eventually but todays BLS numbers say otherwise. 3.8% year over year, highest since 2023. core at 2.8% above forecast. bank of america says no rate cuts until 2027.
i cut travel plans because airline fares are up 20% and i started meal planning tighter after groceries went up 0.7% in april alone. but i am wondering if people are doing more drastic stuff like refinancing, changing retirement contributions, or just riding it out assuming it comes back down.
what are you actually doing differently since the war started pushing energy and food costs up
CPI just came in at 3.8%. food at home up 0.7% in one month. airline fares up 20.7% over the year. is anyone else restructuring their budget around this or are you just absorbing it
byu/Mother-Grapefruit-45 inpersonalfinance
Posted by Mother-Grapefruit-45
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Thanking God I have a plug in hybrid
>genuinely asking because i keep reading that inflation is temporary and the fed will cut rates eventually but todays BLS numbers say otherwise.
Inflation is never temporary. Scope and scale affecting factors might be.
The specific pressures (energy prices) that are at play in this data set could be expected to normalize but I’d say my ‘gameplan’ from this data is to look carefully at things like flying, road trips, look to pare back elsewhere because gas is pricey. I don’t know that I’m diving into my long term budget just yet but I’m certainly limiting osme behaviors.
FYI Rates being cut often BOOSTS inflation. Keeping rates high is intended to cool inflation.
Can’t really restructure budget too much. House payment is about $350, no car payments. Have a few cars I bought for next to nothing. May sell one. Definitely feeling the squeeze
Inflation is temporary – if you are talking about a geologic age. š
Otherwise, it is always around – but it can be negligible or destructive to different people at different times. Lower wage earners feel the pain easily and quickly. Billionaires are largely immune.
I drive less than the average American (less than 10,000/miles/year) with a fuel-efficient car so the pain at the pump hits me less frequently but it still stings when I go. Airfare is shocking to me since I fly mainly domestically and have curtailed it. I thought about doing more road trips instead but the pain at the pump is reining me in.
I’m pretty disciplined in my spending and budget so there’s not much more I can decrease. But, I have the benefit of a LCOL and my wants are very simple.
I’ve been looking at local vacation spots instead. A lot of areas have cool places to visit within a couple hour drive max, and flying is just not on my agenda for a while.Ā
I also got a “long range” electric scooter that’s around 50 miles per charge a couple months ago. It should be fine for groceries and quick trips.
We have cancelled all air travel plans for this year and may make a couple of short-ish road trips instead. No change in buying stuff for everyday living but weāre already on the frugal side.Ā
Driving my electric car, drinking less alcohol and buying more 2nd hand items. Ā No change to overall budget.
We’re cutting pretty much all discretionary spending. No travel, no nights out, no house updates, shopping for cheaper grocery options, and just put the start of the garden in last night.
i read that ANA and JAL were going to add a huge fuel surcharge to flights starting in May so literally on like April 29th I booked some flights for a vacation far in the future so that my family could experience tokyo once together since i don’t know when things will ever normalize. i checked air fares again repeatedly at start of may to compare and sure enough i literally saved $2k by making some extremely forward plans. so that’s one way i’ve done something different.
being smarter about groceries. discovered costco sells packs of 5 dozen eggs for ~$1.4 per dozen (edit – don’t know how it compares to other places, but in my VHCOL city that’s a steal). never thought i’d need that many eggs, but at $1.40 per dozen yeah i’m finding a way.
we sold our car and got some e-bikes and cargo bikes and went car free (plus some lyfts and zipcars to plug in some gaps) back in the pandemic so we’re thankfully sheltered from the insanity of gas prices these days. i would highly suggest folks who are able to, to take a serious look at cutting back on vehicle miles traveled and dropping a car or so if feasible (the biggest predictor of VMT is simply how many cars your household owns). not possible for everyone, but can be a huge way to shelter yourself from spiking costs.
Booked my vacation in January so no worries there. WFH, I spend $60 on gas. Food is noticeably more expensive, but Iām just planning my meals like I always have. Food cost is about $700 a month for 2.
I have a very flexible budget as I donāt pay for housing currently.Ā
Food and housing never come back down
The most important part of this report is that for the first time in over 3 years, inflation has eclipsed wage growth. Real wages are now falling.
Despite how bad the Covid inflation ended up getting, workers still came out ahead in real wages because of the extended period of wage growth being higher than inflation after inflation came back down.
We have an extremely deep pantry so the grocery thing hasn’t been too wild for us yet and there’s only 2 of us anyway. Gas is wild, I am extremely fortunate that I just switched jobs about 3 weeks ago from a 70 mile commute to a 6 mile commute
Inflation being ātemporaryā is irrelevant. You pay the price now and the price doesnt go back down. Fortunately I dont have to drive much but Im choosing to drive less. Its been hitting the grocery budget hard lately and I cant really pare back there. So im pulling back in other areas. Most families will need to revisit their budgets and adjust accordingly. Also, Im not sure who told you rates will go down. The latest fed meeting had votes for increasing rates which combats against inflation (by reducing spending). Gas prices go up fast but come down slow. Even if the war ended today they would remain elevated through summer at least.
We got solar panels and daily drive ev’s so we’re less affected by fuel and electric costs. We also bought a freezer and are buying more in bulk to save money.
Iām only concerned if thereās a 20% correction in the stock market.
Not going on a big trip this year and will drive for trip I have planned. I’ll probably spread out big trips a bit more to give me time to save.