On January 1st my Medicare insurance Part B went up 2.8%. The cost of my drug co-pays have gone up as well as my Part D additional Medicare insurance. My life insurance bill went up 11.7%. The price of a gallon of gasoline increased by 75.2% since last year. The cost of renewing my Driver’s License has increased, as well as my car’s registration and inspection fee. My car insurance has gone up 11.2%. My home heating costs are up by 27.3%. Don’t even get me started on the higher costs of food. What used to cost us $500 a week for two people has skyrocketed to $700 a week (with an occasional $800 thrown in there for a week or two). The price of meat has increased so much hubby and I contemplated becoming vegetarians. But I digress.
My property taxes increased by 22.4%. The cost of electricity has risen (thank the Lord I don’t live in Texas) a mere 3%. My vet bills have increased substantially. The cost of buying parts for repairs and maintenance upkeep have gone up so much that DIYing ourselves can not justify the added cost of labor and services. Restaurant meals are totally out of the question whether dine-in or dine-out. Simply going out for breakfast (the cheapest meal of the day) can set a couple back by $30. A take-away pizza can cost upwards of $20 straight out of a brick oven.
When I got this months’ sanitation bill for our barn, this note was attached:
The costs of almost every single thing we need, buy or use has gone up since January 1st 2021. And from what I’ve heard and read in the financials, they’re just getting started. We’re going to feel so much pain that emanates out of the burden of higher living costs that whatever we endured back in The Great Recession of 2008 is going to feel like a walk in a park. As the government prints more and more stimulus money, the American dollar’s value falls more and more (when compared to the Yen or the Euro). Thus you need more of those American bucks in order to afford anything. Our Federal government, our state government and all our local governments, thanks to both bad management AND the pandemic, are broke. They are going to scheme and try to get the money they need out of us any which way they can.
“Hold onto your hat. It’s going to be a bumpy ride.“ Betty Davis.
The one good thing about this pandemic (if there could actually be anything good at all about this pandemic) is that it has forced my husband and I to stay in our home since March 1, 2020. Staying inside our home meant we stopped spending money. We cancelled our annual vacation. We never went to the beach during the summer. We never entertained. We never went out to eat. We never socialized with friends or family. We didn’t do anything. That in turn meant we didn’t spend any money either. So what did we do with our money? The same thing so many other retirees did with their money: we saved it!
We weren’t alone. Many, many Americans increased their savings by spending less on their lifestyle. Click here for more info. Covid actually increased our retirement savings and now, here we are faced with a mountain of increased costs and by golly, we have the money in the bank (and through investments) to pay these increases. But??? For how long?
Americans didn’t stop saving for their financial futures last year, even though the pandemic made it hard for many people just to make it to the next paycheck. Despite economic uncertainty, the average individual retirement balance hit a new record. That’s according to data from Fidelity, which analyzed retirement savings trends in the fourth quarter of 2020 across more than 30 million 401(k), IRA, and 403(b) accounts.
We got our money to grow and it will somehow keep up with the upcoming runaway inflation, through the power of compounding. Compounding means you earn a return not just on your money but also on the interest it has already accrued. Good compounding, however, is based on time. Lots and lots of time. We only had a year. So far. If we wanted to fully benefit from compounding, we need to NOT touch our money. So, then how are we going to deal with all those increases in our expenses? That’s a very good question. Without an easy solution. I’ve got a painful answer. It’ll mean sacrifice and doing without: it’s called cutting expenses!
After much kicking and screaming, I got our monthly food bill down to $400. It took a while to get hubby on board, but once he made the connection, he was in like Flint! We stopped buying ready-made foods, salad dressings, processed foods etc. I stopped shopping for idle expenditures. I returned an electric blanket, an air fryer, a few new clothes (geez, I miss my sewing machine!) Our Goodwill Store and local Thrift Stores have all closed down due to the pandemic so it’s been tough to find bargains.
I did all the other usual cost cutting we all do every once in a while: no cable/satellite. We installed an antenna and learned to love the free broadcasting stations as well as PBS. We only stream through Amazon Prime when we want to watch a movie. We cut all meals out. We cut our own hair. We cut the dogs hair! We’re putting in a pellet stove and telling the propane company to take a long walk off a very short pier. We turn off the lights, huddle in one room and use as little electricity as possible. This lowered our monthly bill by $50. Every little bit helps.
I do our own bookkeeping and taxes. We already got back our tax refunds! I made up fridge and freezer lists and started tracking our foods. There is no food waste here. More meatless meals during the week. No more beef steaks BUT we still have an occasional beef roast or beef stew. We buy whole chickens and cut them ourselves @.99 a pound vs $2.49 a pound. More soups. More home made hot chocolates. More watching and learning from other frugal couples.
Meet Emmy and Paul. Another New York, early retiree couple (at 55!!!), same as hubby and myself, who also live in upstate New York. It’s been fantastic finding their YouTube Channel, Frugal Money Saver (click here). And they are Italian just like hubby and me. How cool is that? One thing we Italians know, from surviving WWII, is how to be frugal and stretch a buck. I think it’s in our DNA. Here’s one of their early videos explaining how they manage to stay frugal and pay their bills while still on a fixed income:
In other words, with a stiff upper lip and the blessing of our good Lord up above, I have no doubt that my husband and I are going to meet the new financial challenges that will be coming our way, successfully.
If not, there’s always Nomadland (just fooling, but sometimes I seriously think about just giving it all up and running away in our RV!)
If you have any frugal tips you’d like to share, just leave them in the comment section down below. Also, if you want to share your stories on how you kept up with inflation, please feel free to write about them down below. We’re all in this together, unfortunately on the same boat!