Lifestyle Inflation Since I retired
Hello everyone! If you haven’t heard, the New York Federal Reserve concluded that US consumers and businesses are paying 90% of Trump’s spending by 2025. Thanks Trump, for making everything more expensive. Fortunately, relief may be on the way. The Supreme Court struck down Trump’s “emergency” tax. Or maybe not… Trump retaliated with 10%, no 15% of Global Prices. Who knows what it will be like when you read this blog? One thing we know for sure is that US consumers will pay more to enrich the Billionaires.
We can’t control trade policy, but we can control inflation. An inflationary lifestyle is an important aspect of FIRE. Most US workers (64%) are paid live to pay. The more they earn, the more they spend. If you can keep your lifestyle in check with inflation, you will be able to save more and achieve financial independence sooner. That doesn’t mean stopping your lifestyle forever. Some improvements are natural, even healthy. What matters is intentional spending, not mindless upgrades to “keep up with the Joneses.”
I retired in early 2012. I can’t believe it’s been 14 years! Let’s see how the RB40 family has handled inflation since then.
An Ascending Way of Life
Housing: A+
In 2012, we lived in a two-bedroom condo with an amazing view. It was nice, but we passed the condo. We were looking for the perfect yard and location for RB40Jr. In 2019, we moved into our duplex. (We lived in one unit and rented the other out.) It was a big win.
- RB40Jr can walk to school and hang out with friends in the neighborhood.
- We share some expenses with our employer.
- The rent includes the mortgage.
Our monthly housing costs are lower now than they were in 2012. We did very well here and kept our housing costs under control. Most of my friends have nice homes and spend a lot of money on houses.
That said, change is coming. RB40Jr is still young, and we need more space. Next year, I will ask the tenant to move out, which will double our housing costs. After high school, we will probably sell and downsize again. Currently: A+.
Transportation: A+
We bought a new Mazda5 before our son was born. Fifteen years later, we’re still driving it. The odometer is almost 100,000 miles, and still going strong. The van is full of dents and sticks because we park on a busy public road. But I don’t really care about cosmetics as long as they work honestly. I’d like a nice car, but I’m in no rush. Why buy a nice car if it’s going to get beat up on the road? We did very well in this category: A+.
Food: B
In 2012, I went grocery shopping at WinCo regularly. They are cheaper than Safeway and other local grocery stores, but it takes 20 minutes to get there. These days, I’m lazy and shop at Trader Joe’s and Safeway. It’s easy, and it gives us a reason to get out and go. I still try to buy groceries at auction, but the price doesn’t matter much when I need something specific. We cut loose here: B.
Eating out: C
Today, we eat out or order takeout about once a week. This is usually more than 14 years ago. At that time, we rarely ate at home because our son was a baby. Now that our son is in his teens, we go out more often.
I also relaxed in the choice of restaurants. We still support small mom-and-pop places, but we occasionally use larger restaurants. Portland has an amazing food scene, and we want to enjoy it while we’re here.
Yes, we use a lot. But we also make memories.
Grade: C (and I agree with it).
Clothes: A
Personally, I’ve done a good job of keeping my closet frugal. I wore t-shirts and jeans in 2012. I still wear the same things, but with more holes. These days, most of my clothes are “clay clothes.” I can wear them to ceramic class and get clay out of them without worry. Also, Mrs. RB40 is retired now, and doesn’t need to buy work clothes. That’s good. I think we are doing very well in this category: A.
Hobbies: D
I spend a lot of time on my hobbies. In 2012, I was busy with a baby. My only pastime was blogging – and it made money. Today, I spend about $150/month on pottery, and blogging is trending towards negative cash flow. Recently, I spent $1,000 on a good wedding. My lifestyle inflation in the hobby category is high, but it’s actually not too bad in the grand scheme of things. I bet most 52 year old guys spend a lot on their hobbies. How much do you spend on your hobbies? What do you do for fun? Let me know in the comments. It’s technically a D here, but I’m fine with it.
Subscriptions and services: B
The only subscription we have is Spotify for the RB40Jr. I made a deal with him. Can have 1 subscription. If he wants something else, he’ll have to ditch Spotify. Personally, I avoid subscriptions because I don’t like recurring charges.
Services are where I am soft
- Taking Uber instead of public transportation to the airport.
- Paid a plumber to unclog the sink at the first hire.
- Kitchen remodeling and flooring contractors.
- Paying for a haircut instead of a haircut myself.
I still do DIY yard work and minor repairs, but I’m more willing to pay for the luxury now. Grade: B.
Travel: B
Our travel style hasn’t changed much. These days, I try to book a mid-range hotel instead of cheap places. That’s about the only change we’ve made. We still travel independently and don’t buy a lot of things to bring home. I haven’t upgraded to flying business class. That’s a lot of money for a few hours in a great chair. I prefer to spend a nice hotel and activities.
Travel expenses have gone down, but not dramatically. B feels justified.
Lifestyle Inflation GPA: Solid B
Okay, my life inflation GPA is a solid B. That’s great, isn’t it? More importantly, we have retained the Big 3 (housing, transportation, food) mostly under control. That’s what’s most important about FIRE.
We live almost the same as we did in 2012—more comfortable. It will all go up in the next few years, though. We need more space at home, and we will need a new car at some point. I’m glad we held back for so long.
What about you? Have you kept inflation under control? Or have you relaxed a little over the past few years?
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