Quantcast Finally Frugal: Are you keeping up with inflation?

The bumpy road to financial independence. . . .


Friday, February 1, 2008

Are you keeping up with inflation?

I’ve been reading the newspapers voraciously during my commute to work, and have been stunned by the inflation numbers I’m seeing. When food and energy costs included, consumers saw a whopping increase of 4.1% in 2007, compared to a 2.5% increase in 2006. No wonder I’ve been eating beans and rice so regularly and keeping the thermostat at a chilly 58 degrees!

Since I’ve not had a raise in a year and a half (and to be honest, took a hefty pay cut when I moved to Oregon from California in 2006 anyway), I started wondering whether my income has kept up with inflation at all since I finished my master’s degree in 1998.

I recently found an inflation calculator on the Bureau of Labor Statistics website, which tells me that from the time I took my first post-graduate school job until now, I’m making about $500 more than I was ten years ago, when inflation is taken into account! Of course, this doesn’t include the money I bring in from my second job, which will increase my gross income by about $6,000 this year. I left that out because I don’t think citizens should have to take a second job make up for the effects of inflation.

By the way, The Baglady has a great post about the CPI (Consumer Price Index) and how it does (or doesn't) relate to our everyday costs.

However, you feel about the CPI, try out the calculator here; you may be pleasantly surprised! Or, like me, you may end up questioning the employment choices you’ve made over the years. . . . . .


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