I keep hearing on the radio and Internet about how the economy is recovering from the recession. The stock market is back up and high-end retail sales are up and unemployment numbers may, possibly, perhaps, might be starting to turn around. But I haven't seen any evidence that things are actually getting any better. In fact, all the evidence I've seen suggests things will only be getting worse.
For instance, in December 2010 the Secretary of Energy announced that DOE employees and DOE contractors (which I fall into) will have a pay freeze in effect until January 2013. That means my income is not likely to change. However, since December 2010 all of our expenses have gone up not insignificantly.
Gas prices here are nearing $4 a gallon and all expectations suggest that they will continue to rise. In December, they were around the $3 per gallon mark. So we have to absorb a 33% (and possibly higher) increase in gas prices with no possibility of wage increases.
We don't have cable or satellite television, but we do have a Netflix subscription. The price of the same Netflix plan increased from $9 to $11 per month—a 22% increase for the same service.
Our Internet connection increased by $5 per month with no upgrade in service—a 14% increase.
Food prices have been steadily increasing over the last several months. For instance, a head of lettuce used to be about $1.50. This week I decided not to buy it because the lettuce was up to $3 a head and the heads were probably about 2/3 the previous size. I understand there is apparently a nationwide lettuce problem, but in a more general nature we used to get by on about $80 per week in groceries, but the last several weeks have been closer to $100.
Now, this isn't to say that we're struggling. We're still very blessed to be able to put the same amount of money into savings each paycheck and contribute to our retirement account at the same level we have been. But we are having to make some adjustments to maintain the balance. We've been doing a lot better about not eating at Panda Express as often as we used to (within walking distance, so tasty, so hard to resist). And the Social Security payroll tax reduction that went into effect in January has also helped soften the blow of rising prices.
But all the pundits that keep pretending things are getting better don't seem to be living in the same world as us. We're not going to be increasing our spending on non-essentials so long as necessities keep going up in price. Of course, Netflix is a luxury we can live without (and we're paying for it out of our luxury spending), but Internet access is very close to essential these days, and I don't like having to sacrifice fresh produce (I like lettuce on my sandwiches and tacos!).
We are in the same situation. It is frustrating to read how there is no inflation because refrigerators and televisions aren't going up because clearly those are the things that affect our budgets the most. Gas is going up about twice a day and I have also noticed a jump in what we spend for groceries. Our AT&T bill jumped $10 this month. As for the social security tax decrease, why did they cut payroll withholdings when one of the biggest problems with the federal budget is funding the entitlement programs i.e. social security. When social security is going broke how does it make sense to cut contributions? Everyone was used to paying it so I don't understand how that does anything but contribute to the problem. Fortunately, we still have plenty for our needs. As Grandma always used to say, "we haven't gone hungry yet". That's all.