It is with a heavy heart that I have come to the final awakening that these high prices many of us have had to endure lately, will be here to stay. According to the many reports I have been following lately (click here) Inflation is pushing prices higher and higher, and some of those costs may never come back down to the levels Americans were accustomed to before the pandemic. The people being hit the hardest are folks such as myself: retired and on a fixed income of about $40,000 a year. Granted yes, we used to live on $25K a year, then $30K a year till we hit a high of $35K. I thought we had our retirement made at $40K. Then the pandemic came along, as well as a new administration with new greener laws and our whole economy, as we used to know, came tumbling down. With no end in sight. I suppose the final nail in the coffin is the Ukraine/Russia war. I know things can get a whole lot worse, but I’ve got some real live living readjustments to do if I intend to maintain any semblance of financial order in my quality of life.

We all know that our current rate of inflation is NOT 8.5%. When you go back to the original CPI of how the government calculated the cost of living back in the 1970s (when they included food, energy and fuel) our current rate of inflation now is probably 17%. And rising. The inflationary moment we’re in right now won’t last forever. But the good old days of cheap goods, and even cheaper services, may be long gone.
The higher cost of living, (food, energy and gas) is costing most Americans more than $300 per month (click here). How does one come up with the extra $3600 needed annually just to make basic ends meet? That’s the question of the day. Not even the promise of a raise or an increase in pay can guarantee the income will match (or exceed) the expenses.
Take a look at my own budget. (I close out the month on the 19th):

My monthly limit for the categories, as listed above is $1100. Thanks to the higher costs I am paying for food ($800 vs $450), gas ($250 vs $150) clothes ($70 vs $10) and repairs and maintenance ($374 vs $150) I am $514 over my monthly limit ($1614 vs $1100). I’ve completely eliminated eating out or take-away, all travel and entertainment (no streaming!) and have switched to odd lot and consignment stores for most other expenses and still it’s NOT balancing out! I make up the difference from my savings investment (but it pays a measly 3%, so technically I’m losing money)
The other day I wanted to cook up a batch of turkey chili. Unbeknownst to me, while I was away visiting my sister in Florida for two weeks, my husband ate every single meat in sight without notating it. The only chopped turkey I had in my freezer was the cheap roll type we get for the dog. Of course, it’s fit for human consumption but we prefer to purchase this low grade of chopped turkey for our dog. We mix it in her kibble. Anyway, I made the turkey chili using this roll type meat and when it came time for me to eat it, I choked. It was disgusting. Plus, psychologically I couldn’t eat it because in my mind it was technically dog food. There I was, an elderly senior citizen and I was eating dog food just like the old people did back in the 1970s!!!! How did this happen to me? Thankfully, I had the money to run right out to the store and stock up on meats and refill our freezer. Damm the dire costs! (and thus why my grocery category for the month of April is sky high!) I had to re-stock our freezer.

The biggest adjustment we have made to our expenses has been the elimination of most travel and vacations. We used to go away a lot in our RV but due to the high cost of fuel and the higher increases in booking full hook up sites we have narrowed our travel destinations to just one site, once a year. That would be wintering in Florida. That’s our priority. That’s mainly the sole reason why we bought our RV in the first place. To winter in Florida. I’ve already booked a 3 month stay for January, February and March 2023 and the resort ground offers storage @$35 to $55 a month and I think we are going to leave the rig there when not in use. The savings on gas and overnighters back and forth makes it all doable.
Lastly, my husband has returned to work. He (nor I) really had a choice. Three of his clients are back and there is no way in hell hubby is going to turn down work. He raised his price a bit to compensate for the higher fuel and toll costs. We’re still sticking to our original budget BUT I am saving every last penny he earns in a money market account to prepare for any future increases in our costs of living. Hubby packs a lunch and snack every day (he works 3 to 4 days a week). He also brings along a coffee thermos. We’re not deviating from our goals. We just had to re-arrange them a bit. I’ve eliminated as much as I could off our expenses. I’ve either substituted or did without. All we care about is maintaining our four walls: home, energy, food, vehicles (the last two visits however, to Goodwill caused us to throw the duds in the trash. pure junk! we clothes shop at Odd Lot now). We have a ROKU as our free streaming device. We’re almost done paying off our pellet stove (we already paid off the new couch). We take out at least one zero interest loan per year to pay for one big ticket item. Hubby’s 21 year old riding lawn mower has finally hit the point of no return. Tomorrow our brand new Cub Cadet riding lawn mower will be delivered. That’ll be at least a two year zero interest loan we need to pay off. And then after that, I’ll need a new computer. Mine is already seven years old and as slow as molasses.
It’s always something, isn’t it?
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Great post, Cindi, good research. I am finding prices up a lot here also. I agree that there will be no relief soon. Chris
On Wed, Apr 20, 2022 at 12:09 AM Ciphers From Cindi wrote:
> Cindi posted: ” It is with a heavy heart that I have come to the final > awakening that these high prices many of us have had to endure lately, will > be here to stay. According to the many reports I have been following lately > (click here) Inflation is pushing prices higher” >
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Thanks Chris. We all need to stick together and help each other out. Tough roads ahead. Thank you for your comment.
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Hi Cindi, just because you choose to use the peoples food – ground Turkey to supplement your dogs diet does not make it dog food. And last summer you used it often for yourselves. What a crazy Mind game – reverse psychology you did on yourself! I haven’t bought these Turkey rolls the last six months having so many whole turkeys -so has the quality gone down?
I do my monthly budget starting on the first to the end of the month this coincides with my pension checks. I find decreasing my consumption of food, energy, and gas has my monthly budget below last year’s in all categories. I am saving the difference and adding to my dividend income stream for future inflation. A DRIP investment strategy is working for me and my CPA recommended not paying off my 24 month zero interest loans- divide the current balances owed by one less month and pay that not their minimum which is to low to pay them off within the 24 month. Did you reinvest your 2.5 %CDs to get 3% somewhere ?
For my food budget- I actually have increased the grams of protein that I consume daily, plan my meat, dairy, and produce purchases from items on sale
And my stockpile. Less than fifty dollars for groceries this month. I did my big batch cooking yesterday-barbecue boneless country spareribs, 6 pound roasting chicken, baked potatoes, roasted carrots, butternut soup , and baked apples. Makes it so easy to make simple meals. Sincerely, Lara
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Lara the rolled chopped turkey tasted mushy. not firm like the packaged one. It was yucky. I wasn’t expecting that. Yet I eat the roll sausage, pork and beef. Go figure. It was just a mind game for sure.
Eating less, driving less, going without is not a solution. It seems in order to make it, you have to go without or not use it. Doesn’t make sense. For example: I order to afford to pay an electric bill, don’t use it. I order to afford and pay a heating bill, turn off the heat and don’t use it.
I’ve got tons of leftovers I my fridge. Enough cooking for me for awhile. Lol.
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Did you reinvest your 2.5 %CDs to get 3% somewhere ? I have not found noncallable CDS to be this high yet anywhere. Curious if you found them somewhere.
Electricity is a pay what you use bill and a monthly service charge , when it’s not used because of new energy efficiency you don’t sacrifice your standard of living. Using a sunroom that’s at least 72 degrees from the sun(free) instead of colder rooms (67 degrees) to do your hobbies, reading, sewing, and office work keeps natural gas consumption lower and me warm and cozy. Changing location of my desk to sun room. Cha-Ching! Driving with my cruise control and combining errands with traveling to my family babysitting obligations has decrease my gas consumption by 20%. New habits were easy to establish, too. Using free gift cards for groceries added $1000 of groceries into my larder and $550 into savings I didn’t spend since January. This old dog learn new tricks and it’s added over $200 in savings on energy cost even with the 44% inflationary increase in cost. Eating less and more selectively I feel better and more energetic, an added bonus. DRIP program increases my passive dividend income monthly. In a Roth it’s tax free. Sincerely, Lara
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Did you get my email on the 3% cash back on grocery card?
I get 2.5% compounded on a 5 year CD. I think I have a little over 2 years to go. Then I get .50% on another compounded one. I add them all together and that’s my 3%.
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Yes, I resent the email to your email I sent back on Tuesday. Lara
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I never got it back. But no worries. It is what it is.
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Hi Cindi, Why I like monthly dividends so much. Friday I invested $7430 in one in my Roth IRA paying over 16%with over 50% shares held by institutions, so now until I sale it it pays 16% or $100 a month, $1200 a year. If it goes up to what the analysts predict I will sale it for a capital gain. All tax free in my Roth. Check out the tiny returns on annuities along with CDs. If I invested $ 22,400 I would have the $300 or $3600 you speak of in this article. A 100,000 annuity pays roughly $4500 the last time I checked, this pays $16,000 and I keep the principal. Sincerely, Lara
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Lara, with all due respect, I find it difficult to believe that anyone is making money in the stock market right now. especially with the Dow Jones closing almost 1000 points lower this Friday (4/22) and the futures stating the Dow will drop another 1200 points come Monday (4/25). Everyone I know who is opening up their 401K quarterly reports have lost money. So I find it still difficult for you to state you are earning so much in your investments. Sorry. But I’m just not a believer. If the market continues like this (going down and eventually crashing) and interest rates keep rising, my cash will be coming in super handy as I start earning 7% to possibly 12-15%. I’ve already gotten a half point increase with many more on the way. As the Feds raise interest rates to slow down inflation, interest rates will rise and the stock market will crash and millions of people will lose money.
I may not make a lot of money investing but I never lose and to me, that’s all that matters. I use cut backs and downsizing as a means to handle the rising inflation rates. Worked in the 70s and it certainly is working now.
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I use cutbacks too, as I’ve commented. Previous. There’s no place I can live downsizing in the current economy as cheaply ($750) as the home I own outright. I live close to my family and have caring neighbors. I live comfortably, and have a reasonably priced lawn service and snow plowing service. And now with the dramatic reduction in state taxes to zero big savings. You mainly lose in the stock market only when you sale in panic at a lost. My time horizon if I live as long as my parents is another eighteen years. We both know how much change can happen in two decades. In less then a month I will have a 16% monthly dividend. If and when interest rates rise on CDS my sideline cash will be invested higher there too. I never will have all my eggs in one basket. 16% on some keeps me well ahead of my personal inflation. The $7340 was from the five thousand originally I didn’t pay for flooring and appliances and took zero interest loans instead. In December.. sincerely, Lara
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We downsized to this home we are currently living is, as our retirement home back in 2001. Even with the current price increases in electricity and energy, it still costs us under $800 a month to live here (no mortgage but electricity, taxes, maintenance, insurance etc). I never thought we’d be ‘stuck’ here but we are. I’d have to sell my home for a million dollars if we wanted to relocate, especially to Florida.
My sister lost over $40,000 in her S&P holdings. And yes, she needs the money. I’m certain she has lost even more. If you’re in retirement of course you’re going to sell your stock market holdings! That’s how most retirees survive. They need the money NOW. Not two decades from now.
My measly, little 3% I’m earning is all that I need for now and in the near future. I get the money now monthly, after not needing it for 3 years (5 year total) and it has compounded very nicely.
My mother died at 59 and my father lived till 92. I’m 71 right now and am planning for my eventual true old age. My kids aren’t going to help me. My plan is to eventually sell my home and move into an assisted living arrangement till I die. Hopefully the equity in my home will allow me such dignity. Till then, I just continue to live as frugally balanced as possible. You’re so Lucy you have a son. Mine died at 5 months and I still think of him thirty-five years later. He would have been 35 years old today. Oh well.
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So sorry your son died so young. You haven’t mentioned him before.
So sorry your sister has had quite a loss and needs to tap her stock holdings to live. Thankfully my pensions adequately cover my monthly expenses and I haven’t had to touch my holdings, yet. My Mother had to go to a nursing home for a month of rehabilitation after six weeks in the hospital, and then I brought her home where she died an hour later getting her wish to go home. Life sucks sometimes you have to force yourself to move forward and count your blessings in the now. Sincerely, Lara
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Thanks Lara. We never talk about him. Ever. But today I thought about him. His name was Brandon. I hope to pass on as my dad did. He lived in his own home till 3 weeks before his death. My sister took good care of him and hired a sleep-in helper from Monday to Friday at $600 a week to help him out. My sister took over the weekends. She did an excellent job and my dad was very fortunate to have her. My two daughters couldn’t be bothered with me at my old age. They already told me they would put me in a nursing home so fast there would be skid marks in my driveway. Nice girls, eh? I’ve been working on getting my older life in order, thus why I was thinking about my son. I betcha he would have taken good care of his mom. Oh well.
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Hi Cindi, yesterday I redid my budget now getting my yearly house insurance bill which went up .9% . I need to correct my monthly home cost down from $750 to $650. My Energy consumption is where it’s down dramatically. My maintenance account is increasing monthly so I brought that down to zero in my budget from my pensions. I also reduced food, and clothing and increased savings. More Savings will increase my monthly passive income. Sincerely , Lara
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Hi Lara. A lot of people are foregoing clothes this spring. People are making due with their already wardrobes. The was the first week I skipped the loss leader sales. I think I have everything in order and I like the way I situated my stockpile and backup. Now, as I use something, I replace just that one thing. That should help a lot in the cash control department. We’ve seen a massive drop in energy usage thanks to our new pellet stove. We went from using 1200 propane gallons a year, down to less than 500. With propane prices nearing almost $4 a gallon, this one thing has saved us a goodly amount of money! Yay!
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I bonds (purchased through Treasury Direct) could work for some long-term nest egg savings – possibly one of the only investments directly showing a benefit from current inflation levels. The rate is currently at 7.16% but due to reset on May 2 with a possible reset to over 9%.
There are some important restrictions with I bonds. Once invested the money absolutely cannot be touched for a year. After 12 months there is a 3 month interest penalty. Also limits of $10,000 per person per year.
Am enclosing a link with more info. We have not done Treasury Direct in a very long time, but will definitely be looking into it on May 2nd!
https://www.cnbc.com/select/what-are-i-bonds/
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A lot of our friends are recommending iBonds. I don’t know if I could not touch the money for a year after investing nor would I want to lose 3 months of interest if and when I do. Thanks for the info. It’s extremely relevant in this current economic downfall. Thanks again!
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Even with the loss of 3 months interest (if cashed in after 12 months) I bond yields would be far higher than any other bank or credit union options currently available. A different way to look at losing interest is to consider the bottom-line yield after subtracting the interest penalty. I’d ballpark it to be in the 7% range – still excellent for a US Treasury backed investment!
The bigger barrier is of course the not being able to cash in until after 12 months. I bonds are not for everyone, but a good option for longer-term investing.
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I agree.
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Great job on reducing your propane use. Will you need to use it to keep the house warm while you are in Florida for three months?
I do inventory control and did this also yesterday. I won’t need so many things till January 2023- I basically have reduce replacement to needed produce, meat, eggs, and dairy. CVS monthly $10 CarePass will cover my drugstore needs. Probably be at $50-$60 a month. Totally. Sincerely, Lara
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The house gets completely shut down and drained when we’re away for long periods. I would imagine keeping the thermostat at 50F would be minimall impact on our bottom line.
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