How are you handling rising food and energy costs?

[Christine]

And that in itself can create feedback cycles. If all we're hearing is news about inflation, we're going to expect more inflation. And so companies know they can raise prices, and may do so just to test the waters of consumer response. If consumers keep buying - and when it comes to food, gas, and utilities, most of us will - the higher prices will stick. And they'll fuel more news stories about inflation, which will set the expectation of higher prices, and on and on it goes.

And here's the thing--despite all the hand wringing and complaining, consumers are still buying. Quite a bit. Demand has not slowed at all. I'm not sure how that can be, but it is what is going on. When demand slows there WILL be a correction. No one wants homes, apartments, consumer goods sitting unbought. Obviously there's many people living at the poverty level or just above it. They've got to be feeling it, but it has not been enough to put a dent in demand.

 

[Mackenzie Click-Mickelson]

I think that’s a lot of what ticks us people off, the complete lack of perspective of how this whole thing has played out differently for different castes of society

I almost responded to you about our situation but stopped several times because you seemed like you you viewed things in a lens of disdain and contempt. We are better off as whole than we started when this pandemic hit, a combination of refinancing the house in spring 2020 (although it was like a bit more than 1% less as the mortgage rate was already low-ish relatively speaking), paying off our loans during the pause (although we still have private loans), and most importantly a job switch at the beginning of the year that came with enough of a pay raise but also a more than doubling of the health insurance deductible plus a loss of 2 weeks per year of vacation and going from 10 weeks stored up to zero.

However, we aren't characterized by your perception into things of how our situation has been over the years. Everyone's perception is relative to their situation and everyone's situation is a lot more nuanced than blue collar vs white collar or middle, upper, poor, etc class.

It also doesn't mean that we aren't impacted by rising costs be it for travel related or everyday living. In April we started having to pay an increase on our utility bills due to the Feb 2021 deep freeze. And we started searching for a car in May 2021 and quickly abandoned due to the car issues nationwide and globally but we are driving now a car that is 20 years old (a 2002 that I've been driving for just about 17 years) and a 12 year old car (that has been driving that whole time). Our money at the grocery store isn't going as far as it used to and things are just overall costing more in general.

We don't play a game with people we know of who has it worst, we know people who have it worse than us we know people who have it much better than us.

 

[Colleen27]

Wealthy people are not causing inflation.

In general, that's true. I'm not sure you can make that statement with regard to housing specifically. At this point, about a quarter of home sales are going to investors, a percentage that has doubled over the last decade, and in some markets that number can be as high as 40%. The fact that rents are high and rising fast is attracting a lot of wealthy investors to the residential and single-family housing space that were not previously interested in being landlords, and that is driving up costs for buyers who are stuck trying to compete with cash offers and investors who know that rents are running 150-200% of the cost of a mortgage on a comparable property. The interest rate hikes will likely push some more leveraged investors out of the game, but those who are paying cash will have even more of an advantage over would-be owner-occupants.

I fill up my tank once a week and the cost has more than doubled almost tripled so why is your friend wrong saying her gas budget has tripled? When the whiners as you put it bought there RV's and boats they were not expecting the kind of inflation were seeing nor were they were expecting gas prices to double or triple. Saying they aren't happy with their payments is just speculation.

I am worse off then I was two years not because someone has told me how to feel. My decreased disposable income tells me that.

Gas prices haven't even come close to tripling - they bottomed out during the lockdown just below $2/gal. after floating around $2.50-$3 for years. Now they're just under $4. Even if you use the absolute bottom of the market when there was no demand because of a global pandemic, that's a doubling. Not triple. And if you use "normal" prices - ie, not spring of 2020 but any time in 2019 - the increase is even less. But "prices have tripled" is a talking point I've seen in a lot of ads recently and I don't think it is a coincidence that it is also the complaint being voiced.

 

[lowlight]

And here's the thing--despite all the hand wringing and complaining, consumers are still buying. Quite a bit. Demand has not slowed at all. I'm not sure how that can be, but it is what is going on. When demand slows there WILL be a correction. No one wants homes, apartments, consumer goods sitting unbought. Obviously there's many people living at the poverty level or just above it. They've got to be feeling it, but it has not been enough to put a dent in demand.

Look at average consumer credit card debt, my guess is that's where it's coming from. The times it was at the highest were the Great Recession, the beginning of the pandemic (likely due to stimulus), and now. It's fine when the economy is churning, but take all that debt, raise the interest rates on it (since credit card rates go up as fed raises rates), and now add in the looming unemployment, devaluing of houses (no HELOC), it will be a bad thing. Or maybe we'll all be fine, nobody knows.

 

[MICKIMINI]

It is not our imagination that this economy is wild and doing serious damage to just about everyone. Inflation growing this fast is like a match thrown on a pile of leaves and it will burn until it burns out which could be years? It certainly won't be months. DH and I watched solid middle class families lose everything in 2008-2009. We survived.

Families of all incomes have big decisions to make now and find another way to bring in extra income or cut extras, but better to do both and the sooner the better. Not being aware of the danger or ignoring it won't make it go away. Everyone is vulnerable. Making good choices now may be life changing. Not spending is as good as earning more and it just takes practice.

To suggest people are gullible is insulting. I would say this group is realistic and for the most part empathetic to others who may not be as fortunate. It is up to every individual to live their best life and be responsible for themselves.

 

[lowlight]

It is not our imagination that this economy is wild and doing serious damage to just about everyone. Inflation growing this fast is like a match thrown on a pile of leaves and it will burn until it burns out which could be years? It certainly won't be months. DH and I watched solid middle class families lose everything in 2008-2009. We survived.

Families of all incomes have big decisions to make now and find another way to bring in extra income or cut extras, but better to do both and the sooner the better. Not being aware of the danger or ignoring it won't make it go away. Everyone is vulnerable. Making good choices now may be life changing. Not spending is as good as earning more and it just takes practice.

To suggest people are gullible is insulting. I would say this group is realistic and for the most part empathetic to others who may not be as fortunate. It is up to every individual to live their best life and be responsible for themselves.

You are definitely right that everyone is vulnerable. I was talking with my buddy the other day, and we both said basically at least when the hammer drops our jobs are essential and society can't function without them. The people in office buildings should be worried, too, but instead some can't wait for a collapse so they can buy up cheap houses like in 2008. True story, that's what someone said to me a few weeks ago.

 

[Mackenzie Click-Mickelson]

And here's the thing--despite all the hand wringing and complaining, consumers are still buying. Quite a bit. Demand has not slowed at all. I'm not sure how that can be, but it is what is going on. When demand slows there WILL be a correction. No one wants homes, apartments, consumer goods sitting unbought. Obviously there's many people living at the poverty level or just above it. They've got to be feeling it, but it has not been enough to put a dent in demand.

I've been thinking a lot about that aspect, that demand is still out there and strong. Maybe there was an incorrect assumption made on how certain actions would impact things. I know conventional wisdom is often touted as the reason to do xyz but can anyone call this pandemic and the effects conventional?

We didn't used to have the investor issue as much in our housing market but that has def. taken a direct hit to things. Investors are not buying up homes in my neighborhood so the stupid ridiculous pricing is just because it's a neighborhood that has new homes being built but in other areas in the metro that is having a large impact on houses now. It's been a hot seller's market for over 7 years now but the investor issue is something that was not driving up that anywhere near the same level as say the last year-ish.

There's a 700 unit apartment complex and townhouse complex planned to be built near my neighborhood. Now we are all worried about that high of units because of traffic congestion (the main road is only 1 lane each direction with a stop sign) and the loss of trees very unfortunate but the other thing is this apartment complex will not be an affordable one. Yet again it's not one that is going to address the needs of the most who need it. Yes it will help some get into housing but only if they can afford the rent. The neighborhood nextdoor to it the homes are all over $1 million (the lots to build a house start in the $200K) and then our neighborhood has homes $500K (resale only)-$1.4 million (at least) so it would be hard to put in an apartment and townhouse low enough.

There IS however space to do this in various parts of the county but every time the cities give permission to a developer to build apartment complexes it will always be high up in cost ones thereby not really solving much in the end but people are basically left without much choice. The Section 8 housing wait list is still closed for my county and it was several years long even before the pandemic.

 

[DCLMP]

In general, that's true. I'm not sure you can make that statement with regard to housing specifically. At this point, about a quarter of home sales are going to investors, a percentage that has doubled over the last decade, and in some markets that number can be as high as 40%. The fact that rents are high and rising fast is attracting a lot of wealthy investors to the residential and single-family housing space that were not previously interested in being landlords, and that is driving up costs for buyers who are stuck trying to compete with cash offers and investors who know that rents are running 150-200% of the cost of a mortgage on a comparable property. The interest rate hikes will likely push some more leveraged investors out of the game, but those who are paying cash will have even more of an advantage over would-be owner-occupants.



Gas prices haven't even come close to tripling - they bottomed out during the lockdown just below $2/gal. after floating around $2.50-$3 for years. Now they're just under $4. Even if you use the absolute bottom of the market when there was no demand because of a global pandemic, that's a doubling. Not triple. And if you use "normal" prices - ie, not spring of 2020 but any time in 2019 - the increase is even less. But "prices have tripled" is a talking point I've seen in a lot of ads recently and I don't think it is a coincidence that it is also the complaint being voiced.

Gas in my state has gone from 2-250 dollars a gallon to currently 4.89 the highest was 5.89. Please don't tell me my gas prices haven't come close to tripling. You do realize prices vary from state to state and inflation rates vary from state to state.

 

[DCLMP]

You are definitely right that everyone is vulnerable. I was talking with my buddy the other day, and we both said basically at least when the hammer drops our jobs are essential and society can't function without them. The people in office buildings should be worried, too, but instead some can't wait for a collapse so they can buy up cheap houses like in 2008. True story, that's what someone said to me a few weeks ago.

There will be lay offs already happening in banking industry loan applications are falling off a cliff. If the debt bubble implodes no one will be unaffected. Some how they manage to keep it going.

 

[mousefan73]

Wealthy people are not causing inflation.

Oh that’s not what I meant. I’m just saying that many of the price increases we are seeing have nothing to do with inflation. A friend recently told me her housekeeper wants now

And here's the thing--despite all the hand wringing and complaining, consumers are still buying. Quite a bit. Demand has not slowed at all. I'm not sure how that can be, but it is what is going on. When demand slows there WILL be a correction. No one wants homes, apartments, consumer goods sitting unbought. Obviously there's many people living at the poverty level or just above it. They've got to be feeling it, but it has not been enough to put a dent in demand.

Perfect example is crowd levels and willingness to spend at Disney. Granted one hears how people have adjusted trips ( shorter, maybe no hopper, value iso deluxe) but people are still dumping an insane amount of money at Disney.

 

[mousefan73]

BTW jobs report today and other indicators were very positive today.

Unfortunately we ordered our heating oil weeks ago when it went down but was still high. Price totally went down the past few days.

We’re also saving money by not splurging on our second car. We own our main car and lease our second car; who’s lease is up Financially we could afford a better car but we’re sticking with a Skoda ( son is not happy) Mainly because looking at the next few years it has great mpg and low maintenance costs ( Low over all costs including insurance ). The WV I really wanted is significantly more. This is maybe something we never really thought too much about a few years ago but in the back of our minds we wanna kinda leave a buffer zone if things like heating and electricity really skyrocket. Though all indications are showing things are leveling off and going down. But still better safe than sorry.


Our situation is a bit unique because it’s not really so much inflation that’s causing us to cut back and look to save more, but the fact we have all these additional expenses this year. Both kids are in driving school. Here in Germany drivers Ed is a private thing and it’s going to cost me about 2500 per kid to get their license. We’re looking at a possible new furnace and one of our balcony windows needs to be replaced as a custom-made so we’re looking at a couple grand there too. So the higher price of eggs Is kind of insignificant.

 

[DCLMP]

Oh that’s not what I meant. I’m just saying that many of the price increases we are seeing have nothing to do with inflation. A friend recently told me her housekeeper wants now

Perfect example is crowd levels and willingness to spend at Disney. Granted one hears how people have adjusted trips ( shorter, maybe no hopper, value iso deluxe) but people are still dumping an insane amount of money at Disney.

Things aren't that bad yet, and most people don't understand basic economics much less what's going on today.

 

[mousefan73]

Things aren't that bad yet, and most people don't understand basic economics much less what's going on today.

What happened to my post it seems like what I wanted to son got cut off about my friends housekeeper strange


What I wanted to say is that my friends housekeeper is now wanting $15 more an hour. Though she really doesn’t have any additional costs. Cleaning supplies my friend supplies and travel expenses is really not a factor seeing that she lives in the same town and covers multiple homes in the same area. She went from 45 an hour to 60. That’s like 33% more. I think everyone’s trying to get a piece of the “inflation” pie

 

[MICKIMINI]

Things aren't that bad yet, and most people don't understand basic economics much less what's going on today.

Here in New England, people are getting their oil tanks filled and shocked to actually see that $6.50 a gallon turn into $975.00 for 150 gallons due upon receipt. I ran out to the oil company in May, the day they posted prebuy for $4.99 with the thought that once January hits it will be $10.00. Time will tell on that prediction.

We go to WDW in two weeks (for 3 weeks) and then again in May and October. A lot can happen in a year. If the trip was planned in 2021 and is pre paid (let's hope those people prepaid) then they are unlikely to cancel. I suspect the crowds will be lower in May after a winter of high utility bills.

Our chances of buying a house in FL goes up by the day as prices are going down. We'll see about that in May or October.

 

[DCLMP]

What happened to my post it seems like what I wanted to son got cut off about my friends housekeeper strange


What I wanted to say is that my friends housekeeper is now wanting $15 more an hour. Though she really doesn’t have any additional costs. Cleaning supplies my friend supplies and travel expenses is really not a factor seeing that she lives in the same town and covers multiple homes in the same area. She went from 45 an hour to 60. That’s like 33% more. I think everyone’s trying to get a piece of the “inflation” pie

She doesn't have any additional costs? She has to buy food and pay bills like the rest of us. You don't think maybe she wants a cost of living raise. Unfortunately for her when a recession hits housekeepers are one of the first things cut from the budget. I had a lady cleaning my house back in 2008 and she lost 70% of her customers and went out of business.

 

[DCLMP]

Here in New England, people are getting their oil tanks filled and shocked to actually see that $6.50 a gallon turn into $975.00 for 150 gallons due upon receipt. I ran out to the oil company in May, the day they posted prebuy for $4.99 with the thought that once January hits it will be $10.00. Time will tell on that prediction.

We go to WDW in two weeks (for 3 weeks) and then again in May and October. A lot can happen in a year. If the trip was planned in 2021 and is pre paid (let's hope those people prepaid) then they are unlikely to cancel. I suspect the crowds will be lower in May after a winter of high utility bills.

Our chances of buying a house in FL goes up by the day as prices are going down. We'll see about that in May or October.

What are lower income families that can't afford to fill their tanks going to do? I know handouts are inflationary, but are they doing anything so people don't freeze to death?

 

[mousefan73]

She doesn't have any additional costs? She has to buy food and pay bills like the rest of us. You don't think maybe she wants a cost of living raise. Unfortunately for her when a recession hits housekeepers are one of the first things cut from the budget. I had a lady cleaning my house back in 2008 and she lost 70% of her customers and went out of business.

Of course she does like all of us but 33% more?? seriously. I think that is the issue. We aren’t talking about 5% more or 10% But in this case 33% more and in the rent from my stepmom 100%. These are abnormal increases It’s a vicious cycle and setting precedence. This keeps up somethings gonna crash really bad

 

[MICKIMINI]

What are lower income families that can't afford to fill their tanks going to do? I know handouts are inflationary, but are they doing anything so people don't freeze to death?

Apparently the State is implementing more programs for low income people. We are on the ME border and they are seeing tremendous demand as well. With winter temps sometimes -20 for weeks in a row the furnace runs constantly. On our worst days, we use 3 gallons a day for a 1450 sf house. I don't know how they will have enough funds to cover the need. This is along with a 112% increase in electric rates.

This winter will be brutal. I wrote to our representatives in the spring and got ridiculous excuses, and well I suspect by Wednesday they may be looking for a new job LOL. Karma.

 

[DCLMP]

Apparently the State is implementing more programs for low income people. We are on the ME border and they are seeing tremendous demand as well. With winter temps sometimes -20 for weeks in a row the furnace runs constantly. On our worst days, we use 3 gallons a day for a 1450 sf house. I don't know how they will have enough funds to cover the need. This is along with a 112% increase in electric rates.

This winter will be brutal. I wrote to our representatives in the spring and got ridiculous excuses, and well I suspect by Wednesday they may be looking for a new job LOL. Karma.

Why has your electricity increased so much? My state has the worst inflation in the nation, but thankfully no price increase in electricity or other utilities.

 

[adkkev]

Here’s an interesting article about the rising price of electricity in New England …
https://www.wbur.org/news/2022/09/08/new-england-electricity-prices-natual-gas-utility-auctions