The stock market tanked yet again yesterday, this time spurred by news that inflation is rising.
The Consumer Price Index (CPI) rose by 0.8% last month, the biggest increase since Sept2005.
Energy prices rose by 5.7%.
Core inflation, which excludes energy and food, rose by 0.3% as the cost of clothing, airline tickets and prescription drugs all took big jumps.
I went to pick up shirts from the drycleaning yesterday and I noticed that she was charging an extra 25 cents per shirt now. I asked her about the increase and she says “the rent has increased, everything has increased!”.
So that was a 20% increase.
I used to be able to buy grapes at $1.99/lb but these days, they’re ranging from $2.79/lb (40% increase) to $4.99/lb (150%) at Safeway.
Last year at this time, it cost about $28 to fill up my car and when I filled up last week it was $38 (36% increase). I still have the same car by the way.
I also received the bill for our p.o.box yesterday and it was $56 for a year. I didn’t really think twice about it until I looked up our Quicken records. Last year, it was only $40 for the whole year. This is a 40% increase!
Let’s not forget health insurance. I was paying $86/mth in Jan and Feb 2007 but starting March 2007, it was increased to $104/mth (21% increase).
Unfortunately, we all know that our salaries most certainly do not increase by 20%, 30% or 40% a year!
What does this mean for us?
Expenses are increasing, but incomes are not…so I’ll have to find ways to reduce expenses. Find cheaper places to buy things, buy less, use less and find ways to make more money!