Author Topic: How Are YOU Successfully Beating Inflation?  (Read 50189 times)

OtherJen

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Re: How Are YOU Successfully Beating Inflation?
« Reply #50 on: April 25, 2022, 03:42:01 PM »
For example, when I read that the average new car costs $45k+ these days, it blows my mind. We have never paid near that much for a vehicle.  Our last car purchased was an Avalon with 40k miles for $13k.  It's truly amazing how "rich" you can live with relatively low income.   

A quick local Craigslist search informed me that a 2018 Toyota Avalon with approx. 40k miles is available in the next county for $31k. The version available for $13k was produced in 2012 and has 148k miles. All other options were much older and in much poorer shape.

For kicks, I looked up my own car, a 2012 Prius C with approx 100k miles on it. I paid $15k for it 6 years ago when it had 50k miles. A seller on Craigslist is offering a 2013 version of my car with 150K miles for $11k. Encouragingly, if we sold husband's 2001 Impala now, we should be able to get several thousand $$ for it.

I'm all in favor of buying used cars, but the used car market is as insane as the new car market right now. I'm hoping that we won't need to replace either of our cars for a few more years so that we won't have to pay crazy prices.

Ron Scott

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Re: How Are YOU Successfully Beating Inflation?
« Reply #51 on: April 25, 2022, 08:51:03 PM »
Some people are stating that basically having low expenses to begin with as a way to "beat inflation" however inflation is a relative increase in price and whether you spend $1 or $1000 the relative increase is the same percentage wise. Since the long-standing basic formula for FIRE is based on low expenses reducing the amount needed to live in perpetuity and saving enough to pay those low expenses forever inflation does have an impact on savings and perhaps even the success of a FIRE plan regardless of whether one spends 10k per year or one spends 100k per year.


Real FINANCIAL INDEPENDENCE requires that you are capable of handling quite a bit of variability with respect to market conditions, unexpected expenses, and INFLATION.

If your probable-case financial model shows you can spend $Y per year and you are doing everything you want at Y * .7, for example, you’re FI.

But if you’re going to have to cut back on stuff that are part of your basic spend and get nervous about a few years of high inflation you’re not really FI.

Agreed Ron.  My previous comment about 10% increase would only equate to around $4k was meant to clarify how little impact  it would be.  We actually draw less than 1.5% of our liquid assets annually and a good portion of that is dividends.  We do this by choice, not necessity.

You offer an important lesson that can’t be overemphasized.  True financial independence is quite robust—perhaps not as robust as yours but certainly not dependent on a 4% SWR either.

I’m an adherent to your approach, basically living on interest and dividends, or less. This yields independence via having options.

I would add that frugal spending almost seems to me to be better defined in percentages vs. absolute dollars.  Someone with $5m who spends $75k on a car is as frugal as another with $1m spending only $15k. I suppose there’s a logical limit to this thinking since it would be hard to argue that someone with $30m disposable can be considered frugal for limiting his spend to $450k for a new car, but the reverse holds too: It’s hard to argue that a Westerner with $1m on a 3% SWR plus entitlements can ever be considered frugal when there are hundreds of millions in the world living on far less. “Frugal” is tricky since it’s so relative in the real world.

vand

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Re: How Are YOU Successfully Beating Inflation?
« Reply #52 on: April 26, 2022, 05:41:48 AM »
Keeping my huge mortgage and having inflation do the work for me. Yes, things may get a little tight over the next couple of years as wages may not quite keep up with inflation, but eventually that will pass and I'll be left with a smaller amount of debt in real terms.

People may ask "what if rates go to 10%?" and while this is possible, all you can do is stress test and make sure you are in the last 10% of the population who will be yelling uncle. Mustachianism and living well below your means puts you in a great shape to be counted amongst the last ones standing.
« Last Edit: April 26, 2022, 05:43:41 AM by vand »

Just Joe

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Re: How Are YOU Successfully Beating Inflation?
« Reply #53 on: April 26, 2022, 08:45:22 AM »
Having a fixed mortgage is a good choice IMHO especially when the economy is variable. We have ten years to go. We'll decide then whether we want to stay or downsize. Hopefully the world will be a calmer, quieter place again by then.

Abe

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Re: How Are YOU Successfully Beating Inflation?
« Reply #54 on: April 26, 2022, 08:19:36 PM »
Major spending categories for us are housing (fixed rate for 30 years), aforementioned Texas property taxes with their limited increase, donations (which we set), food (less than 4% of our income, mostly vegetables so not too much change), a fixed 3-year car payment and a fixed 5-year loan for solar panels and batteries. Everything that’s subject to inflation (household supplies, entertainment, etc) is less than 10% of our spending, so I guess 10% of that yields a 1% personal inflation rate?

partgypsy

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Re: How Are YOU Successfully Beating Inflation?
« Reply #55 on: April 28, 2022, 05:58:15 AM »
I'm driving slightly less. That said I need to fill tank only every other month so minimal expense. I admit I had some grocery trips that shocked me. However I changed how I was shopping due to lent, and my trips went from 130-150 per week to 80 (not buying prepackaged desserts, snacks, cereals). Eating this way is healthier, but a little boring. Still, I think I will keep with it for now. I do buy organic free range eggs, organic butter and milk product (along w oat milk) and will continue doing that. A side benefit is youngest who was very active as kid but been sedentary during covid and snacking alot, has been supportive of having less sweets in house, eating healthier, and in addition to doing pe, has been getting in shape. Oldest in college has also been hitting gym (Now I need to catch up :)
« Last Edit: April 28, 2022, 06:06:23 AM by partgypsy »

jnw

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Re: How Are YOU Successfully Beating Inflation?
« Reply #56 on: April 28, 2022, 06:45:20 AM »
I give up, I can't beat it.
« Last Edit: April 28, 2022, 06:47:10 AM by JenniferW »

js82

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Re: How Are YOU Successfully Beating Inflation?
« Reply #57 on: April 28, 2022, 07:09:33 AM »
By spending entirely too much money and taking on additional fixed costs. ;)

More seriously: Wife and I both needed vehicles within the past year and a half.  Given the weird market dynamics in play right now with respect to cars(nonsensical used car prices, interest rates well below inflation), a new vehicle with a low-interest loan is probably the most efficient way to limit the damage of a car purchase that doesn't involve deferring a year or two, and so here we are.  Also, the cars are 1 hybrid + 1 EV, so our gas expenses don't amount to anything more than noise in our budget.

Also bought a house, with a 3% interest rate.

Thus, food + electricity are really the only essential parts of our budget that are at the mercy of inflation.  Virtually everything else is either a fixed cost, or discretionary spending.
« Last Edit: April 28, 2022, 07:30:30 AM by js82 »

Dicey

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Re: How Are YOU Successfully Beating Inflation?
« Reply #58 on: April 28, 2022, 08:03:12 AM »
This one's off the wall and completely unexpected: in anticipation of DH's retirement, we paid cash for a well-researched, used RV two weeks before the pandemic began. DH then opted to continue working and we didn't use her a lot*. We joked that at least she was old enough that depreciation wasn't killing us.  Yesterday we were doing some online shopping together and decided to check RV Trader. We were shocked to discover her much higher mileage siblings are selling for twice what we paid! We'd heard the market had exploded, but this is insane! OTOH, the price of diesel has doubled...

*We did make it to the 2021 Moab Meetup. It was so much fun, we're heading there again for MM 2022, fuel prices be damned! DH will be fully retired by then, so the journey will be even sweeter.

https://forum.mrmoneymustache.com/meetups-and-social-events/moab-meetup-october-2022/

Cranky

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Re: How Are YOU Successfully Beating Inflation?
« Reply #59 on: April 28, 2022, 08:50:24 AM »
I give up, I can't beat it.

I’m trying to be philosophical about it - we’ve had a long run of very, very low inflation, so low that there has been more worry about deflation than inflation.

Now it feels like we’re getting all the inflation at once, but it’s more like prices are catching up to what they would have been without the Great Recession.

jim555

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Re: How Are YOU Successfully Beating Inflation?
« Reply #60 on: April 28, 2022, 08:55:42 AM »
42 oz Quaker Oatmeal $4.14 yesterday, $4.98 today, Walmart.  Stopped eating oatmeal, now eat white rice, bought 80 lbs several months ago.  I think these stores are just gouging at this point.

mathlete

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Re: How Are YOU Successfully Beating Inflation?
« Reply #61 on: April 28, 2022, 09:20:51 AM »
1.) Refinanced when interest rates were at rock bottom.
2.) Asked for a raise that was commensurate with my performance + inflation.
3.) Trying to buy more real-estate and low P/E stock in great companies

I'm taking almost no action on food or gas. They are necessities and they cost what they cost. IMO, even with increased prices, 36 eggs, a bunch of bananas, bulk peanut butter, oats, and broccoli are steal a great deal IMO. As long as I keep meal prepping and resisting the urge to eat out, I'm winning here.


Jack0Life

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Re: How Are YOU Successfully Beating Inflation?
« Reply #62 on: April 28, 2022, 09:59:00 AM »
We do our budget a little differently.

We have our "fixed" expenses and then we give ourself $50/day to spend on variables which includes everything else. Emergency and vacation do not count.
So through out the months we check our variable spending vs "allowable" to see if we're ahead or behind.
If we're behind, we spend less to catch up and spend more if we've ahead.
Basically, our eating out have been less frequent.
Everything is 20-40% more but we pretty much still keeping our budget.

I do feel a lot of places are price gouging and using inflation as a mean to do it.
Prices in restaurants are easily 25-50% more yet I still see plenty of people eating out.
The one place I see the least inflation is Costco. Some of the regular stuff I buy are still the same price or very little markups.


EscapeVelocity2020

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Re: How Are YOU Successfully Beating Inflation?
« Reply #63 on: April 28, 2022, 10:51:14 AM »
The USD is awfully strong right now against many foreign currencies (Norwegian Kroner, Japanese Yen), so that is helping me offset costs when traveling or buying things directly from some foreign sellers...

Gerard

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Re: How Are YOU Successfully Beating Inflation?
« Reply #64 on: April 28, 2022, 11:53:27 AM »
Echoing what many folks have already said, we continue to spend little or nothing in the categories that are inflating the fastest (housing, cars, cow products, restos, labour/shipping-intensive consumer goods).

We've also noticed the shrinking delta between luxury and basic groceries, so we've increased spending in some of areas and offset it elsewhere. Like, two slices of good bacon flavours up chowder as well as four slices of the cheap stuff, and now those two things cost the same.

Our life skills seem to improve at the same rate as inflation, so a meal that cost $2 to make last year now costs $2.20, but it's now as satisfying as a $3 meal. (Not sure how clearly I'm expressing that...)

And getting older and retiring has helped. I qualify for some useful (if minor) age discounts, and our increased flexibility in travel dates lets us find the few remaining bargains.

jnw

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Re: How Are YOU Successfully Beating Inflation?
« Reply #65 on: April 28, 2022, 04:42:04 PM »
42 oz Quaker Oatmeal $4.14 yesterday, $4.98 today, Walmart.  Stopped eating oatmeal, now eat white rice, bought 80 lbs several months ago.  I think these stores are just gouging at this point.

This is how i feel abut the eggs.. were 99 cents per dozen 6 months ago and now $3.18.    Up $1.18 per dozen in 1 day.   Also heavy cream is now $4 a quart from $3 in a single day.  Also natural gas is up 56% and electricity is up 40% -- all in the past year.   I don't see how we only have had only 8.5% inflation in the past 12 months; I think the CPI model they are using is flawed. My home price is up like 40% in the past 18 months.   Seems more liek 20% inflation.  But I'll stop because some people are sensitive here and think I complain too much lol.  Don't want to hurt anyone's feelings.
« Last Edit: April 28, 2022, 04:45:06 PM by JenniferW »

Villanelle

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Re: How Are YOU Successfully Beating Inflation?
« Reply #66 on: April 28, 2022, 07:14:22 PM »
42 oz Quaker Oatmeal $4.14 yesterday, $4.98 today, Walmart.  Stopped eating oatmeal, now eat white rice, bought 80 lbs several months ago.  I think these stores are just gouging at this point.

This is how i feel abut the eggs.. were 99 cents per dozen 6 months ago and now $3.18.    Up $1.18 per dozen in 1 day.   Also heavy cream is now $4 a quart from $3 in a single day.  Also natural gas is up 56% and electricity is up 40% -- all in the past year.   I don't see how we only have had only 8.5% inflation in the past 12 months; I think the CPI model they are using is flawed. My home price is up like 40% in the past 18 months.   Seems more liek 20% inflation.  But I'll stop because some people are sensitive here and think I complain too much lol.  Don't want to hurt anyone's feelings.

Are your gas and electric actually up that much, per unit used, or have they raised the fees and other fixed costs, which would make the % increase to the bill higher for those who use less?

YK-Phil

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Re: How Are YOU Successfully Beating Inflation?
« Reply #67 on: April 28, 2022, 08:00:15 PM »
We spend very little especially after permanently moving to Mexico the day after I retired. No mortgage, no debt, and no plans to buy any consumer goods except the essentials so inflation has not really affected us. Even in paradise, my wife and I continue living frugally, if not spartanly: our overall monthly housing costs are under $300, and our food costs are about $300 per month which is still high, but it includes a weekly splurge at a taco stand and one meetup with friends at a fancy coffee shop for cappuccino and a sweet treat. We don't drink, smoke, or party, and our entertainment budget is close to zero, as we are happy with walking, hiking, going to the beach, etc. We drive -very rarely, a 1995 van that we may replace in 3-5 years.

On the other hand, my adult kids in Canada are struggling financially so what we save by living in a LCOL country goes straight to them which I don't mind. I prefer giving them a little extra now rather than when I'm gone.

Tigerpine

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Re: How Are YOU Successfully Beating Inflation?
« Reply #68 on: April 29, 2022, 07:28:46 AM »
Just paid the natural gas bill.  The price per therm was $2.00490 this month, which is an increase of 33.67% compared to this time last year ($1.49990 / therm).

We are not beating this facet of inflation.   However, previous steps taken to reduce our natural gas consumption (insulation, thermistat setting, etc.) keep our use rather low in general. 

Omy

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Re: How Are YOU Successfully Beating Inflation?
« Reply #69 on: April 29, 2022, 07:31:46 AM »
This is how i feel abut the eggs.. were 99 cents per dozen 6 months ago and now $3.18.    Up $1.18 per dozen in 1 day.   Also heavy cream is now $4 a quart from $3 in a single day.  Also natural gas is up 56% and electricity is up 40% -- all in the past year.   I don't see how we only have had only 8.5% inflation in the past 12 months; I think the CPI model they are using is flawed. My home price is up like 40% in the past 18 months.   Seems more liek 20% inflation.  But I'll stop because some people are sensitive here and think I complain too much lol.  Don't want to hurt anyone's feelings.

The OP asked for positive examples of how members are beating inflation. Do you have any positive feedback to share?

jnw

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Re: How Are YOU Successfully Beating Inflation?
« Reply #70 on: April 29, 2022, 08:05:20 AM »
Do you have any positive feedback to share?

I apologize.  Series I Savings Bonds give me a little hope.  Regardless of inflation I'm still saving 1/2 my income.  I am not dining out or eating convenience food ever.  Keeping my discretionary expenses to around $50 per month.  So I'm doing okay even with inflation.  I get social security income which automatically increases income each year with COLA, so I am fortunate in that regard as well; my brother hasn't gotten a wage increase in over 2 years.  So I really have nothing to complain about, relatively speaking.
« Last Edit: April 29, 2022, 08:11:05 AM by JenniferW »

moof

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Re: How Are YOU Successfully Beating Inflation?
« Reply #71 on: April 29, 2022, 02:16:52 PM »
42 oz Quaker Oatmeal $4.14 yesterday, $4.98 today, Walmart.  Stopped eating oatmeal, now eat white rice, bought 80 lbs several months ago.  I think these stores are just gouging at this point.
At about 1.5 oz (1/2 c dry, 46g) per healthy sized serving that is $0.18 per serving.  Compared to most meals that is nothing, even with inflation.  I put more than that cost into my oatmeal in the form of nuts, raisins, dried apples, and milk.  While I understand venting, it is usually counterproductive to let emotions drive economic choices.

Freedomin5

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Re: How Are YOU Successfully Beating Inflation?
« Reply #72 on: April 29, 2022, 04:38:57 PM »
Stocking up on sales, buying used, and bartering are other ways to beat inflation without sacrificing quantity or quality.

We made several bulk purchases several months ago before lockdown happened in Shanghai. I now see people paying $$$ for toilet paper, but I've avoided that cost because I bought two large cartons of TP months ago.

In addition, with all the expats leaving Shanghai and those who are staying having nothing better to do but to clean out their homes while under lockdown, there are people offering lots of free stuff/cheaply priced stuff. I've already scored several almost new books for DD. We can't access the library and want to limit screen time since she is doing online learning. I've also scored a bit of food from people who are leaving. I am now on the hunt for clothes for DD, as she has outgrown a lot of her stuff.

I also use bartering. Recently, I exchanged extra cucumbers for Chinese veggies. Last week, I exchanged two big bottles of drinking water for a bike. I've participated in clothing exchanges. I volunteer my time helping to sort goods, and in return, I get first dibs on items that come in. I do pro bono work with a group who would otherwise not be able to afford my expertise. In exchange, they often send me boxes of fruit (they have contacts) or other little luxuries that I can't source. Being part of a robust community-based social network can definitely help offset inflation.

jim555

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Re: How Are YOU Successfully Beating Inflation?
« Reply #73 on: April 29, 2022, 05:59:42 PM »
42 oz Quaker Oatmeal $4.14 yesterday, $4.98 today, Walmart.  Stopped eating oatmeal, now eat white rice, bought 80 lbs several months ago.  I think these stores are just gouging at this point.
At about 1.5 oz (1/2 c dry, 46g) per healthy sized serving that is $0.18 per serving.  Compared to most meals that is nothing, even with inflation.  I put more than that cost into my oatmeal in the form of nuts, raisins, dried apples, and milk.  While I understand venting, it is usually counterproductive to let emotions drive economic choices.
I already stopped oatmeal a few months ago for different reasons.  My rice serving is about $0.07.  Prices going up is one thing, but leaping up like what I am seeing is very alarming.  The Fed needs to get this in check fast. 

stoaX

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Re: How Are YOU Successfully Beating Inflation?
« Reply #74 on: April 29, 2022, 06:11:51 PM »
One way we are partially offsetting the effects of inflation is reducing alcohol consumption.  Not the funnest way but probably healthier.  Mrs stoaX is doing better than me at it. 


Villanelle

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Re: How Are YOU Successfully Beating Inflation?
« Reply #75 on: April 29, 2022, 07:16:04 PM »
Stocking up on sales, buying used, and bartering are other ways to beat inflation without sacrificing quantity or quality.

We made several bulk purchases several months ago before lockdown happened in Shanghai. I now see people paying $$$ for toilet paper, but I've avoided that cost because I bought two large cartons of TP months ago.

In addition, with all the expats leaving Shanghai and those who are staying having nothing better to do but to clean out their homes while under lockdown, there are people offering lots of free stuff/cheaply priced stuff. I've already scored several almost new books for DD. We can't access the library and want to limit screen time since she is doing online learning. I've also scored a bit of food from people who are leaving. I am now on the hunt for clothes for DD, as she has outgrown a lot of her stuff.

I also use bartering. Recently, I exchanged extra cucumbers for Chinese veggies. Last week, I exchanged two big bottles of drinking water for a bike. I've participated in clothing exchanges. I volunteer my time helping to sort goods, and in return, I get first dibs on items that come in. I do pro bono work with a group who would otherwise not be able to afford my expertise. In exchange, they often send me boxes of fruit (they have contacts) or other little luxuries that I can't source. Being part of a robust community-based social network can definitely help offset inflation.

I think this is a great point that isn't often mentioned, and that I never really thought much about until your post.  Thanks for adding something new to this thread.

I'm an introver with pretty severe social anxiety, and we move frequently, so my network of local connections is quite small.  This is a good reminder that there are many reasons I should work on that.

That said, this week someone on my local Buy Nothing group was offering a 1000 piece puzzle.  Not only that, it was a White Mountain collage puzzle, which are our absolute favorites, but they are expensive.  (I think $18 new.)  Thankfully, I was selected.  In our DMs to exchange info, I asked if she'd like me to bring one of our completed puzzles and she said yes.  After pick up, I messaged to thank her and told her that we usually have a couple finished puzzles laying around, so next time she finishes one, if she wants to she is free to reach out to me directly (rather than through BN, when other people would be throwing their names in the proverbial hat) and we can trade.  At a minimum, I got one free puzzle, but since I tried to create a small connection, I'm hopeful that maybe there will be more.  In fact, I plan to reach out on a few weeks and offer her a completed puzzle, whether or not she has one to trade, just to try to cement the relationship.

I'm also planning--again through my local Buy Nothing group--a pet 'unsale'.  This is basically a garage/yard sale, but everything is free.  Plan is to have people drop off any kind of pet supplies to my house for a couple weeks.  Then on a set day, for a few hours everyone can come and shop.  No need to bring anything in order to be eligible.  Everything left at the end will be donated.  But I've got plenty of toys my dog sniffed once and didn't care for, or treats that we were given that they don't like, and even an extra harness we were given.  Hopefully someone can make use of those things, and hopefully I can get some things for my girls.  And it also helps create more of a network. 

Lots of creative ways to not only save a few bucks, but also to make connections that might lead to ongoing savings, as well as just social support.

Abe

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Re: How Are YOU Successfully Beating Inflation?
« Reply #76 on: April 29, 2022, 07:27:16 PM »
Just paid the natural gas bill.  The price per therm was $2.00490 this month, which is an increase of 33.67% compared to this time last year ($1.49990 / therm).

We are not beating this facet of inflation.   However, previous steps taken to reduce our natural gas consumption (insulation, thermistat setting, etc.) keep our use rather low in general.

Ours is up 37%, but that's translated into a 80 cents a day difference.
For electricity, the lowest available price in the Houston area is now 10.8 cents / kWh versus 8.1c/kWh last year.  Interestingly, plans that subsidize renewable energy are about the same (12-13 cents), suggesting this is driven mostly by increased natural gas prices (very little coal is used in Texas and the one nuclear plant hasn't had any issues this year).

Meat/dairy/egg prices are up due to drought conditions and avian flu wiping through factory farms.

Lumber prices are up due to widespread tree loss in Canada coupled with increased transport costs.

Prices of useless plastic junk from China will go up because of transport costs, COVID and petroleum costs.

Lot of different things going on, but overall if one can decrease consumption of luxury items (including meat), it should be manageable.

Morning Glory

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Re: How Are YOU Successfully Beating Inflation?
« Reply #77 on: April 30, 2022, 07:24:37 AM »
42 oz Quaker Oatmeal $4.14 yesterday, $4.98 today, Walmart.  Stopped eating oatmeal, now eat white rice, bought 80 lbs several months ago.  I think these stores are just gouging at this point.

This is how i feel abut the eggs.. were 99 cents per dozen 6 months ago and now $3.18.    Up $1.18 per dozen in 1 day.   Also heavy cream is now $4 a quart from $3 in a single day.  Also natural gas is up 56% and electricity is up 40% -- all in the past year.   I don't see how we only have had only 8.5% inflation in the past 12 months; I think the CPI model they are using is flawed. My home price is up like 40% in the past 18 months.   Seems more liek 20% inflation.  But I'll stop because some people are sensitive here and think I complain too much lol.  Don't want to hurt anyone's feelings.

Looks like there is some truth to reports of stores passing on "more than their increased costs" to consumers in order to increase profits:

https://www.vox.com/2022/2/20/22943257/inflation-corporations-price-hikes-consumer-price-index

The Walmart near me often has one price on the shelf and another (always higher) at the register.  I've taken to scanning everything with the app before I'll put it in the cart, to make sure the price is correct.  Walmart and Target in my area have both been fined for incorrect listed prices.

jim555

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Re: How Are YOU Successfully Beating Inflation?
« Reply #78 on: April 30, 2022, 08:52:52 AM »
Looks like there is some truth to reports of stores passing on "more than their increased costs" to consumers in order to increase profits:

https://www.vox.com/2022/2/20/22943257/inflation-corporations-price-hikes-consumer-price-index

The Walmart near me often has one price on the shelf and another (always higher) at the register.  I've taken to scanning everything with the app before I'll put it in the cart, to make sure the price is correct.  Walmart and Target in my area have both been fined for incorrect listed prices.
I've seen Walmart.com price differ with Walmart B&M.  About 2 months ago .com had a hair dryer for about $6, the store was $11.50, same item.  I asked them to price match themselves and they said they don't do that.  Had to order it online.  Yesterday I had a oil filter online at $9.97, store shelf $11.34.  Asked them to match and they did, so maybe they changed the policy.  Also the online price sometimes is way high for no reason.  The unit pricing is another issue.  Larger package normally means cheaper per unit.  Not always the case, and Target is even worse for the unit pricing issue.  The shelf price can differ from the checkout price.

Food pricing can be all over the place depending on the store.  Chicken breasts @ $1.99 lb. vs $3.49 lb, so you really have to shop around and never assume about pricing these days.  Store apps with coupons that don't "take".  That is another issue.

jaysee

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Re: How Are YOU Successfully Beating Inflation?
« Reply #79 on: April 30, 2022, 10:44:25 AM »
My costs are so low to begin with that there's barely any room for inflation. What inflation there is, I'm easily counteracting, through investments, extra work and frugality.

Housing - I was already paying slightly above-average (for me) rent, for various reasons. But this rental is turning out to be an excellent deal. The landlord is friendly and seems to like me being here; I'm renting part of his house, so he probably cares about having a safe, trustworthy tenant. It seems unlikely that he'll increase the rent. In case he does, I've been doing a lot of market research and it looks like I can probably get a similar deal elsewhere at a similar price. In short, housing inflation doesn't seem to affect me, especially given my very modest expectations.

Food - I've been focussing on getting stronger and losing fat. Eating less works well with this goal. I've been eating very healthy, frugally and increasingly minimally. Fasting is great for the mind and body. Certain food items have gone up, but most of the basic food items are so cheap to begin with that a few percentage points higher price makes hardly any difference. If anything I'm paying less for food now than I was 2 years ago, due to eating less overall and being careful and frugal with what food I do buy.

Transport - Working remotely has been a real blessing. I don't own a car, so I have zero concerns about fuel inflation or increasing maintenance costs. I hardly even use public transport, preferring to walk wherever I need to go. Public transport is heavily discounted on weekends, so if I ever do need it, I save money by using it then.

Clothing - Not that my clothing needs are that extravegant to begin with, but I've recently discovered just how easy repairs can be. Walking shoes with cracked soles - can be plugged with "shoe goo". Socks with holes - can be patched with cloth using fabric-compatible superglue. Holes in jean pockets - can be fixed by stapling with a stapler then covering with masking tape. By repairing rather than replacing clothes I've saved money and avoiding paying higher costs to replace them.

Phone - Instead of spending $500 to replace my phone battery I bought a portable battery for $200. It's very powerful and can charge my phone multiple times, works with any USB accessory and fits neatly into my backpack. I may eventually spend on a phone upgrade anyway, but for now, this solution works well.

Work - I'm working two jobs and earning incredible income that way. Since they need people, and the labor market is tight, I can put in a reasonable (not excessive) effort into each job and it's unlikely either of them will want to let me go. This income more than offsets inflation, and is helping me to boost my cash allocation, which I plan to hang on to, in light of the prospect of interest rate rises. Maybe some banks will pass on the rate rises via high interest savings accounts. If not, I still think cash is a useful asset to hold now, especially in light of recent stock market sell-offs.

Summing it up - I'm beating inflation by not spending much to begin with, maintaining my belongings, increasing my cash allocation and taking advantage of new work/income opportunities that didn't exist previously.
« Last Edit: April 30, 2022, 10:54:05 AM by conwy »

TomTX

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Re: How Are YOU Successfully Beating Inflation?
« Reply #80 on: April 30, 2022, 12:24:11 PM »
The Walmart near me often has one price on the shelf and another (always higher) at the register.  I've taken to scanning everything with the app before I'll put it in the cart, to make sure the price is correct.  Walmart and Target in my area have both been fined for incorrect listed prices.

Take photos of the shelf prices and make them honor posted prices.

rmorris50

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Re: How Are YOU Successfully Beating Inflation?
« Reply #81 on: April 30, 2022, 12:34:44 PM »
1. Buying a new build house Sept 2020 with a 2.5% 30-yr fixed mortgage, and watching the value of the house increase 40% since.

2. Buying out my 2019 car lease. Never thought I’d have a call option in the money on a leased car.

3. Consistently having invested in the stock market for over 20 years now.

4. Taking it on the chin in terms of eating out and travel, but after COVID and having amassed so much wealth we aren’t going to cut back yet on these things.

5. Also doing upgrades to our house, that type of work has gone up in price. But since we now spend more time than ever at home we don’t mind spending to upgrade.

6. Will continue to work, even though my wages are suffering since I didn’t even get a COL raise. But I’m committed to a break after this gig, so not looking to  jump ship and dive into another job. And the pay is still good enough.


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EscapeVelocity2020

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Re: How Are YOU Successfully Beating Inflation?
« Reply #82 on: April 30, 2022, 01:41:53 PM »
1. Buying a new build house Sept 2020 with a 2.5% 30-yr fixed mortgage, and watching the value of the house increase 40% since.

2. Buying out my 2019 car lease. Never thought I’d have a call option in the money on a leased car.

3. Consistently having invested in the stock market for over 20 years now.

4. Taking it on the chin in terms of eating out and travel, but after COVID and having amassed so much wealth we aren’t going to cut back yet on these things.

5. Also doing upgrades to our house, that type of work has gone up in price. But since we now spend more time than ever at home we don’t mind spending to upgrade.

6. Will continue to work, even though my wages are suffering since I didn’t even get a COL raise. But I’m committed to a break after this gig, so not looking to  jump ship and dive into another job. And the pay is still good enough.

This brings up an interesting thought - although if you were to sell the house and car, you would lock in the inflated gains, in the present you are still spending a ton of money.  It's like that 'but I'm saving so much by buying stuff' fallacy... 

On the other hand, living in the house we bought in 2009 during the housing bubble bust as well as having paid off the remainder of our 15 year loan (I mean, a 2.5% loan is still paying to borrow money), all feels like truly beating inflation.  We still get hit having to pay higher property taxes, but we are avoiding a whole lot of other expenses.  Same with having paid off cars that we bought 2015 - 2019.  Not going to be spending money on another car for a while, hopefully.

Not sure how we could be 'beating' inflation other than by downsizing our lifestyle, but no plans to resort to those measures...

rmorris50

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Re: How Are YOU Successfully Beating Inflation?
« Reply #83 on: April 30, 2022, 03:10:14 PM »
1. Buying a new build house Sept 2020 with a 2.5% 30-yr fixed mortgage, and watching the value of the house increase 40% since.

2. Buying out my 2019 car lease. Never thought I’d have a call option in the money on a leased car.

3. Consistently having invested in the stock market for over 20 years now.

4. Taking it on the chin in terms of eating out and travel, but after COVID and having amassed so much wealth we aren’t going to cut back yet on these things.

5. Also doing upgrades to our house, that type of work has gone up in price. But since we now spend more time than ever at home we don’t mind spending to upgrade.

6. Will continue to work, even though my wages are suffering since I didn’t even get a COL raise. But I’m committed to a break after this gig, so not looking to  jump ship and dive into another job. And the pay is still good enough.

This brings up an interesting thought - although if you were to sell the house and car, you would lock in the inflated gains, in the present you are still spending a ton of money.  It's like that 'but I'm saving so much by buying stuff' fallacy... 

On the other hand, living in the house we bought in 2009 during the housing bubble bust as well as having paid off the remainder of our 15 year loan (I mean, a 2.5% loan is still paying to borrow money), all feels like truly beating inflation.  We still get hit having to pay higher property taxes, but we are avoiding a whole lot of other expenses.  Same with having paid off cars that we bought 2015 - 2019.  Not going to be spending money on another car for a while, hopefully.

Not sure how we could be 'beating' inflation other than by downsizing our lifestyle, but no plans to resort to those measures...
Interesting. But when I bought my house and car, my net worth didn’t go down, I just transformed how my balance sheet looks, more leveraged. If I sell the house and car, I lock in gains but my NW at that time remains the same, except for transaction costs. “Buying stuff” implies buying things with little or no resale value, in this context, and thus would reduce my NW. BTW I have enough assets to buy my house and car outright, so I don’t have to rely on future wages to pay the loans.

So what does beating inflation mean? Not having my purchasing power decreased because the government is implicitly defaulting on its debt (aka inflation). How do I measure that?

One way is to project out my NW over the rest of my life in a spreadsheet, which I do, which includes an inflation assumption on non-fixed expenses. Then I increase the inflation assumption, keeping all else equal, and see how much my projected NW decreases. Then see what adjustments I have to make to my expenses and/or investments to get back to a similar NW. By having a fixed house and auto payment, inflation isn’t impacting my projected NW via those two cashflow items. Maintenance expenses of those two items is impacted by inflation tho.

Of course I can maximize my projected NW further by decreasing expenses regardless of what inflation is, but that’s a different question than how am I adjusting to offset the impact of inflation, everything else equal.

And I know I answered this from a totally different perspective than most Americans do, which is can I continue to cover my “necessities” via cashflow from wages.


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EscapeVelocity2020

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Re: How Are YOU Successfully Beating Inflation?
« Reply #84 on: April 30, 2022, 04:04:48 PM »
Yeah, that's all I was getting at, not singling your post or situation out.  What really does 'beating inflation' mean?

So what does beating inflation mean? Not having my purchasing power decreased because the government is implicitly defaulting on its debt (aka inflation). How do I measure that?

One way is to project out my NW over the rest of my life in a spreadsheet, which I do, which includes an inflation assumption on non-fixed expenses. Then I increase the inflation assumption, keeping all else equal, and see how much my projected NW decreases. Then see what adjustments I have to make to my expenses and/or investments to get back to a similar NW. By having a fixed house and auto payment, inflation isn’t impacting my projected NW via those two cashflow items. Maintenance expenses of those two items is impacted by inflation tho.

Of course I can maximize my projected NW further by decreasing expenses regardless of what inflation is, but that’s a different question than how am I adjusting to offset the impact of inflation, everything else equal.

And I know I answered this from a totally different perspective than most Americans do, which is can I continue to cover my “necessities” via cashflow from wages.

It's a good exercise to really think it through as you have.  Most people just think 'beating inflation' means spending the same or less than last year, but if you just end up deferring purchases, in the long run you might not beat inflation, or, more accurately, you'll have to lower your standard of living.

It gets even more difficult to judge when your wages and investments go up to match inflation, in nominal terms you have to be up 10% which probably feels like a win until you notice that your bank account still ends up at the same balance by the end of the year.

Telecaster

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Re: How Are YOU Successfully Beating Inflation?
« Reply #85 on: April 30, 2022, 04:58:16 PM »
I have a nice  30-year fixed-rate low interest mortgage which means my housing costs are decreasing over time in real terms.  I also have an investment property also with nice 30-year fixed-rate low interest mortgage.  Rents should increase with inflation (and seem to be).  If the properties only increase at the rate of inflation, I get to keep the delta. 

In this aspect anyway, inflation is my friend at the moment. 

TheAnonOne

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Re: How Are YOU Successfully Beating Inflation?
« Reply #86 on: April 30, 2022, 09:35:43 PM »
I have a solar array and power rates are going up. Essentially this increases my ROI. Somewhat interesting situation. (net metering)

mastrr

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Re: How Are YOU Successfully Beating Inflation?
« Reply #87 on: May 01, 2022, 09:59:32 AM »
-paid off residence
-paid off car
-no debt of any kind
-by being very against subscriptions of any kind
-have very little cash tied up in cars or any similar depreciating assets
-combing through a lowering necessary reoccurring expenses by switching providers / negotiating (internet, insurance, cell phone plan etc.)
-investment portfolio consists of 100% stocks
-making a bunch more money than I was previously
-paying cash for everything

jnw

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Re: How Are YOU Successfully Beating Inflation?
« Reply #88 on: May 01, 2022, 10:14:55 AM »
I have a solar array and power rates are going up. Essentially this increases my ROI. Somewhat interesting situation. (net metering)

I need to get this as well after I pay off my mortgage.  I also have access to net metering.

rmorris50

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Re: How Are YOU Successfully Beating Inflation?
« Reply #89 on: May 01, 2022, 10:20:23 AM »
Are the only true ways to beat inflation is to invest in assets and a career/job that provides real returns greater than zero? Reducing expenses doesn’t seem like beating inflation, you’re giving up something (goods/quality/lifestyle). Adapting to inflation and keeping up/beating inflation are two overlapping but different things.


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mastrr

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Re: How Are YOU Successfully Beating Inflation?
« Reply #90 on: May 01, 2022, 10:43:09 AM »
Are the only true ways to beat inflation is to invest in assets and a career/job that provides real returns greater than zero? Reducing expenses doesn’t seem like beating inflation, you’re giving up something (goods/quality/lifestyle). Adapting to inflation and keeping up/beating inflation are two overlapping but different things.


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Hedging against inflation seems like a better term as there is no beating it.  Naturally the more money you make the more you can invest in assets that have a ROI over the inflation rate of 3-4%.  The less you spend the more money you can invest into those assets.  Personally, I like to keep my monthly expenses low so it gives me flexibility in other spending areas.  The question wasn't how am I losing to inflation (which there would be plenty of ways!).  I think everyone has to evaluate what is important to them individually and adjust accordingly.

EscapeVelocity2020

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Re: How Are YOU Successfully Beating Inflation?
« Reply #91 on: May 01, 2022, 11:50:43 AM »
Are the only true ways to beat inflation is to invest in assets and a career/job that provides real returns greater than zero? Reducing expenses doesn’t seem like beating inflation, you’re giving up something (goods/quality/lifestyle). Adapting to inflation and keeping up/beating inflation are two overlapping but different things.

This should also inform how you go about choosing investments.  Some companies have pricing power or inelastic demand, and will keep up with inflation.  Simply cutting expenses is not, ultimately, going to be a winning long term strategy.  I wish I were a real estate investor, but I'd make a terrible landlord - way too soft hearted.

The Fed finally seems to be getting the message that they better get their butts in gear and fight inflation, they are way behind the curve.

less4success

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Re: How Are YOU Successfully Beating Inflation?
« Reply #92 on: May 01, 2022, 03:21:39 PM »
Reducing expenses doesn’t seem like beating inflation, you’re giving up something (goods/quality/lifestyle).

Reducing expenses doesn't necessarily negatively impact your quality of life. That's kind of the entire point of the MMM blog!

rmorris50

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Re: How Are YOU Successfully Beating Inflation?
« Reply #93 on: May 01, 2022, 03:47:49 PM »
Reducing expenses doesn’t seem like beating inflation, you’re giving up something (goods/quality/lifestyle).

Reducing expenses doesn't necessarily negatively impact your quality of life. That's kind of the entire point of the MMM blog!
Agreed, but too subjective to help answer the original question. Best to leave that variable constant in determining how your are offsetting your lost purchasing power.


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K_in_the_kitchen

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Re: How Are YOU Successfully Beating Inflation?
« Reply #94 on: May 01, 2022, 04:50:03 PM »
We put off buying another vehicle as long as we could (oldest took the compact car to university, leaving us with our van, and our youngest is at home getting ready to commute to the local university).  We purchased a used Prius from a family friend, knowing it was well maintained and would be a good choice for the around town driving we do. So our fuel costs have dropped.  We won't be affected if DH has to return to office, since we chose nearly 30 years ago to live within walking/biking distance of his workplace.

I'll be honest, while I'll do everything I can to save water this summer, and I'll dry clothing on the line to save natural gas, I have no intention of reducing our electricity usage if it means we have to be uncomfortably warm.  I'm more productive if it isn't hot in the house.  Electricity costs are up, yes, but not so much that we can't run the A/C.

Groceries really are the biggest place we are affected, since the house is paid off and property taxes increases are protected (Prop 13).  I bought 50# of Calrose rice last month, since it is great for a variety of uses, including as a breakfast porridge.  We already had 50 - 60# of basmati and sushi rice.  I bought more popping corn, which I grind into cornmeal and use for mush and polenta, or for cornbread (we also pop it for snacking).  I bought whole wheat berries, and wish I'd gotten more since they are now out of stock.  I'm ordering oat groats for flaking; rolled and quick oats are out of stock, and I've been wanting to flake grains for some time now.  It's time to order 50# of flour as well, as a hedge against not being able to get wheat berries.

I dropped cereal (for the young adults) and whole milk from the grocery list.  There are a couple of boxes of cereal from Costco in the pantry for our oldest.  I'll be making his non-dairy milk alternative, probably a combo of rice and oat milk.  Once the cereal is gone he can switch to porridges or toast.  The gluten free kid already eats rice for breakfast on a regular basis, often adding an egg and bits of leftovers for fried rice.

I bake our bread, giving us a superior product at a better price.  Being able to cook and bake really helps with beating inflation.  We don't buy convenience foods like frozen meals, cookies, crackers, etc.  We make pizza at home with homemade dough and sauce made from tomato paste.  Soups are made from scratch.

We are eating meat from the freezer and not buying more unless the prices are in the loss leader range. When grass-fed Polish sausages went on sale at Costco we purchased the limit, and back in February we got b/s chicken breast for 89¢ per pound at Aldi, and we got as much as we could (just one trip with two adults).  I've been buying a rotisserie chicken each time we go to Costco, because it's cheaper than a whole chicken. We eat it for a couple of meals and then I make stock.  We're also adding in more meatless meals with eggs or cheese for the protein.

We found a Sodastream machine at Goodwill last year, and while we had to buy the bottles and chose to buy a second cylinder, we're still coming out ahead versus buying sparkling water in cans.  We don't need sparkling water, but DH enjoys it and it's one of those little things.  Plus we don't buy any soda.  We're turning free neighborhood lemons into lemonade.  We make iced teas (herbal and black).

We don't need to add to our wardrobes and will make do (because even thrift store clothing prices are sky high).  I bought 100+ books at 10¢ each at a thrift store sale, leaving me with plenty of reading material.  We "entertain" ourselves with things we already have: guitars, vinyl albums (mostly inherited), craft and sewing supplies, a ping pong table, bikes.  We sit on the front porch for atmosphere.


Ozlady

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Re: How Are YOU Successfully Beating Inflation?
« Reply #95 on: May 01, 2022, 09:06:25 PM »
i just went ahead and increased all my tenants' rents; ranging from 5.4% to 17%...
All did not blink...granted i always keep my rents slightly below market rents...


Cassie

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Re: How Are YOU Successfully Beating Inflation?
« Reply #96 on: May 01, 2022, 09:43:06 PM »
I was able to reduce expenses by making substitutions for things that don’t affect my quality of life. However, I have 2 Maltese and vet costs as well as dental for myself have skyrocketed. Groceries and car gas have also really increased. Luckily I only use a tank of gas a month.

rmorris50

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Re: How Are YOU Successfully Beating Inflation?
« Reply #97 on: May 02, 2022, 08:47:08 AM »
I was able to reduce expenses by making substitutions for things that don’t affect my quality of life. However, I have 2 Maltese and vet costs as well as dental for myself have skyrocketed. Groceries and car gas have also really increased. Luckily I only use a tank of gas a month.
Yes, I also have a lot of fat in my spend there I can cut out and it won’t materially impact my quality of life. Even though technically inflation is costing me those things.


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Arbitrage

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Re: How Are YOU Successfully Beating Inflation?
« Reply #98 on: May 02, 2022, 09:20:56 AM »
I think it's worth pointing out that we are all likely being affected by inflation on periodic or irregularly purchased items, even if it hasn't hit our savings accounts yet.  Just because I haven't had to purchase a new hot water heater, or my car insurance, or hospital bills, or child care, or assisted living rent, or whatever since last October, doesn't mean that I'm beating the inevitable inflation that is occurring on items like that.  I will need those things eventually, and I will probably be forced to pay the newly inflated price once that need arises. 

That is, unless you feel like this is a temporary spike, and prices will actually deflate.  That might happen for certain goods like specific grocery items and gasoline, but other prices/costs like wages are sticky and rarely deflate. 

Villanelle

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Re: How Are YOU Successfully Beating Inflation?
« Reply #99 on: May 02, 2022, 09:33:56 AM »
I think it's worth pointing out that we are all likely being affected by inflation on periodic or irregularly purchased items, even if it hasn't hit our savings accounts yet.  Just because I haven't had to purchase a new hot water heater, or my car insurance, or hospital bills, or child care, or assisted living rent, or whatever since last October, doesn't mean that I'm beating the inevitable inflation that is occurring on items like that.  I will need those things eventually, and I will probably be forced to pay the newly inflated price once that need arises. 

That is, unless you feel like this is a temporary spike, and prices will actually deflate.  That might happen for certain goods like specific grocery items and gasoline, but other prices/costs like wages are sticky and rarely deflate.

In my case, I do feel like this is a semi-temporary hike.  The 'semi' is because I don't necessarily expect prices on most thing to drop all the way back to where they used to be.  Some things will drop and some--like used cars--may even drop a lot. But since we are still in an earning phase, I think wages will catch up and that, combined with the increases leveling off (increases; but necessarily prices) mean that if I had to bet on it, I'd bet that the costs relative to wages won't stay as elevated. 

It also helps that part of our retirement plan is an inflation-adjusted pension. Unfortunately, that means the pension will still lag slightly behind prices, but I think that delaying purchases, or purchase that don't yet need to be made, can help even that out. 

IOW right now that water heater may be up from $1000 to $1100 in a year, with wages upon only 5%, so 10% vs 5%  But on a few years, that water heater will probably only be $1150 and wages will be up 12%, making the delta less painful. 

All that is just a guess, of course.  But I think that in a time of high inflation, putting of purchases makes sense, even though it isn't without risk because that water heater could be $1300 in a few years and the wages could only be up 8%. 

All of this is also reason to just save more, which is where things like my free puzzle come in to play.