Why does it feel like people have unlimited budgets, even with crazy inflation?

[Anonymous]

Shouldn't the high inflation tamp down demand, even a little?

It seems like even though everyone is complaining, they are all just coughing up the money and not actually changing their purchase patterns. Does it feel this way to anyone else?

[Anonymous]

Rich people aren’t affected by inflation

[Anonymous]

Everyone got huge raises. Who cares if it wasn’t quite equal to inflation because most people’s personal inflation isn’t the headline number. If you own your home outright or have a low-cost mortgage, your rent isn’t increasing. Rent is the biggest part of the CPI increase. Instead, the big raise just falls to the bottom line.

[Anonymous]

Sounds like lots of people have more money than you do.

[Anonymous]

Because you associate with people who are wealthy. And DCUM is also a wealthy bubble.

[Anonymous]

A lot of people switched jobs during COVID and usually job switching comes with a raise...Many also got stimulus payments or simply saved an unusual amount of money during the pandemic not going out or traveling.

[Anonymous]

You might just not see it, OP.

We are not wealthy and did not get richer during the pandemic. In fact, I had a pretty bad year in my business last year because the rate increases tanked demand in my sector and my second half was trash.

We absolutely notice inflation and have changed a lot of our spending habits as a result. When a bunch of my work projects got stalled last year, I used the extra down time to really crack down on our food and clothing spending, and started aggressively shopping deals (like reviewing grocery store circulars and doing meal planning based on deals, clipping coupons, plus selling some older clothes online and using only the proceeds of those sales for new clothing purchases, or buying on consignment to save).

But because I went into low cash flow mode last year, when inflation started to come down this year AND my business picked way up in January, we are now spending more normally again on non-food and non-clothing items. I'm still watching our grocery/takeout/clothing budgets like a hawk, but we are taking a couple nice vacations and doing stuff like going to the movies and going to sporting events, things we didn't do at all last year because of belt-tightening.

Milk and eggs are back to more normal prices, as are most produce and even meats and cheeses. And now we're in the habit of not doing as much restaurant meals/take out or buying the pricier prepared foods at the store. So coupled with a return to my normal income, it feels like we have more disposable income. But it's kind of an illusion.

[Anonymous]

Oh the meh it’s only the working and middle class who’s been impacted so who cares. Unless you are the one percent-it will impact you eventually when it all comes tumbling down.

[Anonymous]

Yes, it does feel that way.

For us, it means less savings.

[Anonymous]

Well my income has gone up over $100k since Covid and I’ve had multiple bonuses

[Anonymous]

Because they still have the money. Or they have credit cards with limits that allow them to pretend they have the money.

[Anonymous]

If you don’t spend all of your income (including essential savings/investments like housing and retirement) then it doesn’t really mean anything except that maybe less money is going towards the general investment area.

[Anonymous]

Anonymous wrote:Because they still have the money. Or they have credit cards with limits that allow them to pretend they have the money.

Nobody rich carries credit card debt.

[Anonymous]

Those with cash in the bank are finally earned decent interest.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Because they still have the money. Or they have credit cards with limits that allow them to pretend they have the money.

Nobody rich carries credit card debt.

No, because they wouldn’t need to now would they? People who are MC/UMC and keeping up with the Joneses do.