Everything Is More Expensive

[Dakota731]

Honestly I get really bugged about comparing the cost savings lifestyles of a generation+ ago to the current generation.

When we bought our house in the 80s we had a variable rate of 18-21% and had to put 20% down, and inflation was much higher than it is now, so I get tired of young people saying we had it so much better then. We paid our own way through college, worked two jobs and earned (even in real dollars) way less than people nowadays. The difference is definitely the spending, it’s just a fact no matter how you want to spin it. We started out with a tiny house not a 3000 sq ft house like first time homebuyers have to have nowadays. We drove our cars for ten years and didn’t spend hundreds of dollars a month eating out. There is definitely an entitlement attitude among many young people (not all - I’ve raised my kids to work hard for what they have and to be self reliant not spending beyond their means). So many expect to make large salaries at an entry level without putting in the work, my husband sees it every day in HR. It wasn’t a bed of roses when we started out either but we paid our dues and watched our pennies and didn’t expect someone else to pay our way.

 

[StacyStrong]

When we bought our house in the 80s we had a variable rate of 18-21% and had to put 20% down, and inflation was much higher than it is now, so I get tired of young people saying we had it so much better then. We paid our own way through college, worked two jobs and earned (even in real dollars) way less than people nowadays. The difference is definitely the spending, it’s just a fact no matter how you want to spin it. We started out with a tiny house not a 3000 sq ft house like first time homebuyers have to have nowadays. We drove our cars for ten years and didn’t spend hundreds of dollars a month eating out. There is definitely an entitlement attitude among many young people (not all - I’ve raised my kids to work hard for what they have and to be self reliant not spending beyond their means). So many expect to make large salaries at an entry level without putting in the work, my husband sees it every day in HR. It wasn’t a bed of roses when we started out either but we paid our dues and watched our pennies and didn’t expect someone else to pay our way.

And I didn't say life was easier - I said it was different.

It's super weird that millennials seem to be killing every industry because they aren't spending in those industries and that first time home buyer ages keep rising, yet they also seem to be spending like crazy and buying 3000ft sq homes. Super weird.

I'd love to be introduced to those crazy kids.

 

[vacationer1954]

It’s the willingness of folks to take on debt that allows retailers to sell their high priced goods for more.

It is far more complex than that. It is a cycle: Consumer to producer to workers who are consumers so let's go 'round again. No one part of the system is to blame; it is a co-dependent relationship. Break any link of the chain and the whole system crumbles - massive unemployment, markets in free-fall, etc. Yes, there are some people who benefit more from this arrangement than others, but even there there are no easy answers. Tax policy and regulation affect investment behavior; these aren't switches you can turn on and off but rather levers that you have to move very little and very slowly.

 

[vacationer1954]

The problem with the insurance discussion is that you need some to keep yourself from wiping out your savings. This is especially true of healthcare insurance. You might think you’re saving money by getting a high deductible, but if a major accident happens, it can wipe out a good chunk of savings.

As we're looking at various health insurance options in retirement, we're finding that that isn't always the way it works. A high deductible doesn't erase Out-of-pocket maximums required by Obamacare, which keep a "major accident" from having that impact about which you are concerned. So even using their "high use" estimate, it shows total yearly cost of $15K for Bronze ($7900 deductible), $19K for Silver ($6000 deductible), $18K for Gold ($2000 deductible), $19K for Platinum ($1000 deductible). I think they're are counting on the idea that if you're seeing the money come out of your account every time you visit a doctor, you're going to think twice about unnecessary visits, and as a result, they make those Bronze plans less costly overall. I'm not sure I'm bold enough to take the chance, but it seems to me that someone who is can benefit financially from a high-deductible plan.

 

[RamblingMad]

As we're looking at various health insurance options in retirement, we're finding that that isn't always the way it works. A high deductible doesn't erase Out-of-pocket maximums required by Obamacare, which keep a "major accident" from having that impact about which you are concerned. So even using their "high use" estimate, it shows total yearly cost of $15K for Bronze ($7900 deductible), $19K for Silver ($6000 deductible), $18K for Gold ($2000 deductible), $19K for Platinum ($1000 deductible). I think they're are counting on the idea that if you're seeing the money come out of your account every time you visit a doctor, you're going to think twice about unnecessary visits, and as a result, they make those Bronze plans less costly overall. I'm not sure I'm bold enough to take the chance, but it seems to me that someone who is can benefit financially from a high-deductible plan.

You have to read the wording on these carefully. I saw some plans last year that didn't kick in until year two.

 

[vacationer1954]

You have to read the wording on these carefully. I saw some plans last year that didn't kick in until year two.

I believe that that would be illegal. Perhaps you can provide a pointer to what you mean?

 

[RamblingMad]

I believe that that would be illegal. Perhaps you can provide a pointer to what you mean?

Some of the plans listed had coverage that didn't kick until year two on the insurance plan. There is nothing illegal about this.

 

[tvguy]

Other issues in price are supply and demand and popularity. For example, I bought my kids Razor Scooters 20 years ago for $100* each when they were hot. Today, that same Razor Scooter is $30.

*$147 in today's dollars. So the price has dropped about 80%

 

[kydisneyfans]

How are we coping?
Being as frugal as possible.
Our largest expense, and it's not even close, is taxes. We work a side job to pay taxes so we can keep our main paychecks. It may only be 12-22% to the Feds, but add in another 7% for social security/Medicare, 5% to the state, 3% local, then toss in property, vehicle, sales, fuel, utilities, tax on insurance, and it's close to 50%. If you want to give relief to the middle class, start here.

Health costs-insurance increased 50% through my employer this year. It's the largest dollar increase ever. We max out HSA cards to lower income and have the funds on hand for medical bills. My insurance has increased over 400% since 2013, after it was stated costs would drop.

Other ways:
-our son decided to hit tech school/community college instead of the 4 year degree we had saved for. He graduates this year with a 2 year degree and already landed a permanent job making just a few dollars an hour less than I do at 46. It saved around $40,000 in tuition, and he makes nearly 50K a year, at 20 years old and no college debt. If he wants to continue to a Bachelor degree, he now has the income to do it, or his company will chip in.

-vehicle negotiation-we bought a Mazda CX-7 new in 2010 for 24K. We decided to replace the car with a Toyota Rav 4 and was able to get a loaded model with a $29,991 sticker price for $23,900. We have a nicer car, more safety features, and better reliability, for less than we paid 9 years ago. Our insurance also dropped $400 a year due to the safety upgrades.

-credit card rewards-everything possible is charged if we were going to pay it anyway. Cel phones, cable, water, insurances, tuition, fuel-all are costs that we can get some points from. This assists with vacation costs big time, from free/reduced hotels with free breakfast to free/discounted flights. We're finding it cheaper to fly to Europe than to west coast cities like Seattle and San Francisco from KY. We have RT flights to Paris in Sept that we paid $399 RT for from Lexington(on CC rewards, it was free). I looked at a Seattle trip in June and the tickets were $550 a piece.

We try to buy anything possible through web portals to stack points/savings. I had a $200 Lowe's order for yard goods last week. Went to Kroger and bought a $200 Lowe's gift card on Chase Freedom to get 5% back. That also gave me .80 off in fuel, or $28 off 35 gallons. In addition, I went through the SW airlines portal and received 100 miles for the purchase. The points=$10, we get $28 off fuel, and a few miles were added off a purchase I was making anyway.

-We've looked at pulling the cord on cable, but need high speed internet to work from home. Taking the cable portion off would increase the bill to the point that any other type of cable replacement(hulu, youtubetv, etc)would actually make it more expensive than the combo bill now. My wife and I are using older cel phones, not much savings there plus our area doesn't have the strongest signals in the world so switching carriers is out.

-Groceries-I'm not seeing the spikes that many are reporting in my part of the world. Meat seems cheaper than several years ago. Seasonal produce remains affordable, dairy prices are stable, bread hasn't gone up. Some individual stores have raised some prices, but others have not. It pays to look at ads and shop where the deals are.

-Fuel-it seems like a big jump but heard today it's only a dime a gallon more than this time last year. Gasbuddy is your friend, along with Kroger fuel points. We are driving back and forth to Louisville to visit a family member in the hospital several times a week(140 miles RT) and Gasbuddy alerted us that an exit we pass has fuel for $2.47($2.44 with Speedy Rewards card). That's .25 cheaper than by our home. Take $3-4 off each fill up twice a week and it adds up.

Disney-we bought DVC in 2013 resale for about 50% less than resales at the same resort are going for now. Tickets are gold AP's, bought through ticket bridging to save about $80 each. We do grocery orders and eat very little in the parks. Our largest expense there are flights, the second largest expense ironically is dog sitting.

Lots of way to adapt to increasing prices.

 

[MillauFr]

How are we coping?
Being as frugal as possible.
Our largest expense, and it's not even close, is taxes. We work a side job to pay taxes so we can keep our main paychecks. It may only be 12-22% to the Feds, but add in another 7% for social security/Medicare, 5% to the state, 3% local, then toss in property, vehicle, sales, fuel, utilities, tax on insurance, and it's close to 50%. If you want to give relief to the middle class, start here.

We are lucky to live in Washington State which has some of the lowest taxes in the country for wealthy residents. No state income taxes. No local income taxes. Vehicles and fuel taxes are high but our family has only 1 older car so I don't pay very much. Sales taxes are high but are easily avoidable if you but online.

 

[vacationer1954]

Some of the plans listed had coverage that didn't kick until year two on the insurance plan. There is nothing illegal about this.

You must have had a gap in coverage. If you have continuous coverage, from one insurer to the next, it is illegal.

 

[vacationer1954]

Other issues in price are supply and demand and popularity. For example, I bought my kids Razor Scooters 20 years ago for $100* each when they were hot. Today, that same Razor Scooter is $30. *$147 in today's dollars. So the price has dropped about 80%

I think a lot of people today don't remember how much it cost to fly back before 1978. And while hotel room rates are a lot higher, we just paid about half that rate for an airbnb and got a three bedroom house to ourselves instead of a tight little hotel room - that's an option that didn't exist years ago. And I recently was clearing out 50 years of accumulated paperwork and other records from filing cabinets and found a promo about earning bonuses that we could use to pay for long distance calls, back when unlimited long distance calling wasn't included in any monthly fee.

Heck, we just went looking for comps to help us price our soon-to-be-empty filing cabinets when we put them for sale on Nextdoor, and we got the impression that we might have to pay people to take them off our hands rather than get paid for them, since so few people have to deal with keeping paper records, now that electronic records are becoming the norm - filing cabinets, file folders, plastic folder tabs, etc... more costs of the past that we no longer incur here in the future.

 

[tvguy]

I think a lot of people today don't remember how much it cost to fly back before 1978. And while hotel room rates are a lot higher, we just paid about half that rate for an airbnb and got a three bedroom house to ourselves instead of a tight little hotel room - that's an option that didn't exist years ago. And I recently was clearing out 50 years of accumulated paperwork and other records from filing cabinets and found a promo about earning bonuses that we could use to pay for long distance calls, back when unlimited long distance calling wasn't included in any monthly fee.

Heck, we just went looking for comps to help us price our soon-to-be-empty filing cabinets when we put them for sale on Nextdoor, and we got the impression that we might have to pay people to take them off our hands rather than get paid for them, since so few people have to deal with keeping paper records, now that electronic records are becoming the norm - filing cabinets, file folders, plastic folder tabs, etc... more costs of the past that we no longer incur here in the future.

Or a basic 4 function calculator that cost $75 in 1975 and is $2.93 today.
https://www.walmart.com/ip/Sharp-EL233SB-Pocket-Calculator-8-Digit-LCD/14006014

 

[RamblingMad]

You must have had a gap in coverage. If you have continuous coverage, from one insurer to the next, it is illegal.

It still qualifies as continuous coverage. It just doesn’t pay for certain things in the first year. This nonsense is why I want universal healthcare. My buddy in Norway doesn’t have this rising healthcare problem.

 

[TwoMisfits]

It still qualifies as continuous coverage. It just doesn’t pay for certain things in the first year. This nonsense is why I want universal healthcare. My buddy in Norway doesn’t have this rising healthcare problem.

Not be be political, but the US health care is the best in the world. It's why the richest of the world, like Mick Jagger, come to be treated in our country, not theirs.

What folks are always discussing is the cost of US Healthcare and who should bear it. Right now, we have a cost system that allows everyone the best in the world care, whether they can afford it and without worrying how much they use it. That means most of the system's costs fall to those who can afford it - the middle class and up, and the least sick bear some of the costs of the most sick.

The drive to make public the costs of procedures and medical tests is a drive to both make them more efficient and to drive the middle class level to the "less cadillac, but still effective" options - to try to drive more affordability through informed use vs "diktat from above" that tends to be about enforced limiting of use (if the government or insurance companies get to decide).

That's as much as I'll say b/c anything else gets political, but when "the grass is always greener", maybe we should actually research what the grass elsewhere gets and what their richest citizens do for their health. B/c for me, I'd rather be in the country able to use Mick Jagger's doctor, than be in the one where I have to watch from afar as he has the 100K to travel and drop on an immediate life-saving procedure at age 75 that I will never have.

 

[RamblingMad]

The two biggest increases I have seen for cost of living is healthcare and university tuition. Both of these eat into consumption rates.

I’ll post some stats later tonight.

 

[Carrie Ellis]

I love the Budget section of Disboards! Pretty much the only one I read except the Camping one. I have always been thrifty. The oldest kid of a single income household, my dad was a Dallas, TX police officer.

I once took my income off after completing Turbo Tax. You have to do this afterwards (just don't save it the 2nd version). I wanted to see how much I would need to bring in to make up the difference if I quit my job (not thinking I would quit but just to have a plan B if something happened). Granted, you have to also consider the loss in retirement and social security contributions but still, if push come to shove, what you are living on currently is what will matter at the second. It really was not that much that I was actually bringing in cash wise, only 24K out of my pretty nice salary. We lose so many credits because we both work. We also hit a larger tax bracket since we both work and the additional tax brackets are over both salaries. Out of that 24K, if I had to pay daycare, that would pretty much wipe that out. Since I am a stay at home federal employee I don't have to have additional clothes, food or transportation.

Many people do not do that math of what additional income does to your overall. Also, I really wish our system did not penalize for working more. That is my #3 biggest issue for current times. My husband is going back to drilling with the Army next month and that additional income will be something I need to do the math on.

#1 is insurance, it is killing us. If you use it, it actually goes up. Such a messed up system. I told all 4 of my kids you can not get tickets (I had a lead foot as a teenager so I had to say I understand..). Wrecks...omg. We help with insurance as long as the kids are going to school and doing very well. I did take the oldest two off ours and they have their own policy. I was able to do this because they don't have our address anymore. I was going to do that for my younger two but the insurance rep advised not to because we carry higher limits because of what we own. If the kids had a wreck and we were sued (since they live here they would go after us) we would need it. All this has changed since I was a kid and very much so since my parents were kids. Cars have become so technical that when you get insurance on your raggedy car, you are not insuring yourself but insuring if you hit someone else's super technical car. USAA told me that when I asked why ours is the price for older cars. He said that since cars are advancing so fast, it will continue to rise.

New cars vs cars in the 80s and 90s, you can't work on your own. Then it falls in the hands of hoping the mechanic does not tell you something that is not true. We still have an older truck (2003) that we can do all the work on.

#2 taxes......killing us in Georgia. My parents live in TX and I read yesterday that some metro areas in TX are doubling property taxes. My brother's did last year in Fort Worth.

I heard on the radio yesterday that state colleges in Georgia are going up 2.5% this year. Maybe not a lot but more than our cost of living raise this year.

My parents never took vacations growing up. I know that is a perk of this generation. No excuse there. But otherwise, I do believe it is a lot more difficult on families now. We are responsible for our kids until they are 26 according to the government but they don't want us to see their medical records after 13 years. When it comes to college, they require parents income to determine eligibility for loans and grants. But, I can't call the school and ask questions as a parent. Just pay and shut up. I laugh hysterically.

Of course I am a rebel and I fight the system as much as possible. We have a small farm and raise our own meat and such. It also helps in taxes (property and income).

 

[RamblingMad]

The marriage penalty still doesn’t make sense from a tax perspective.

 

[vacationer1954]

It still qualifies as continuous coverage. It just doesn’t pay for certain things in the first year.

I don't believe there are any metal plans like that. Perhaps you can mention which specific plan and which specific services you're talking about.

 

[vacationer1954]

Right now, we have a cost system that allows everyone the best in the world care, whether they can afford it and without worrying how much they use it.

Despite measures taken to prevent it, poverty in the United States still often leads to lack of essential healthcare, and to inadequate quality healthcare leading to less outcomes within poor populations as compared to more affluent populations.