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

[Anonymous]

I think on car purchases and home repair UNC income people on the ball bought before things got worse - which if they were going to buy a car anyway was cheaper in the long run. People didn’t normally buy a lux car may have been able to buy more with Covid savings. We did a home Reno during early Covid but had bought materials before new higher prices kicked in.

Think about it - for a year+ many saved BIG - on gas (work from home), eating out (HUGE) savings, entertainment (no need to buy latest fashion, no fancy dinners), travel sports and other kid activities, and travel. Many UNC cut out huge expenses that are normally a big burn rate and piled up money. Plus, they may have gotten subsidies They can say “what ev’s” - for now

Now, if layoffs/banks/economy topple/etc …will be interesting and you’ll be glad you saved. Perhaps some didn’t..

[Anonymous]

Anonymous wrote:I think on car purchases and home repair UNC income people on the ball bought before things got worse - which if they were going to buy a car anyway was cheaper in the long run. People didn’t normally buy a lux car may have been able to buy more with Covid savings. We did a home Reno during early Covid but had bought materials before new higher prices kicked in.

Think about it - for a year+ many saved BIG - on gas (work from home), eating out (HUGE) savings, entertainment (no need to buy latest fashion, no fancy dinners), travel sports and other kid activities, and travel. Many UNC cut out huge expenses that are normally a big burn rate and piled up money. Plus, they may have gotten subsidies They can say “what ev’s” - for now

Now, if layoffs/banks/economy topple/etc …will be interesting and you’ll be glad you saved. Perhaps some didn’t..

This. Cutting out childcare (no aftercare because of virtual school) and travel we probably saved $30k in 2020-2021. I'm sure others saved even more.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The average student loan payment is $400/mo, which people for whatever reason still aren't expected to resume repaying, regardless of their total income.

Chill out repayments resume in August.

Just like the last time payments were set to resume. I'll believe it when I see it. This administration takes inflation "very seriously."

[Anonymous]

-We refinanced. Our mortgage (which doesn't include PITI since we pay that separately) is $1100 on a 1m house.
-We are actually getting passive income from interest now!! We have 250k that we made next to nothing on for years and now all of a sudden I'm getting about 1k a month in interest. Daycare costs and groceries rose, but that 1k covers everything. Savings accounts have better interest rates than stocks. My vanguard is only at 3.3% for the year.

[Anonymous]

Anonymous wrote:The only major change has been groceries. I used to spend $150/week and now it’s close to $200 each week. Kids clothes, sports, camps are all the same or small annual adjustments to be expected. Our mortgage is a low fixed rate, our cars are paid off. Inflation hasn’t impacted us because we have a healthy margin of error between our incomes and our expenses.

I'm surprised your camp expenses have not increased. For us, childcare (full-time daycare) expenses increased dramatically over the course of the pandemic which makes sense in a tight labor market.

[Anonymous]

Anonymous wrote:Yes, it does feel that way.

For us, it means less savings.

+1

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The average student loan payment is $400/mo, which people for whatever reason still aren't expected to resume repaying, regardless of their total income.

Chill out repayments resume in August.

Just like the last time payments were set to resume. I'll believe it when I see it. This administration takes inflation "very seriously."

+1

[Anonymous]

Anonymous wrote: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?

Previous purchase patterns can’t continue in aggregate. See UPS earnings and their comments on the shift in consumer behavior. However, individuals around you may shrug off higher costs due to their career trajectories. Reminds me of the thread about the economic divide growing wider mid-career.

[Anonymous]

You also have to remember that a lot of people are not smart with their money (even if they are big earners now). It isn't always easy to tell when people are having money issues. It rarely appears on social media.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The average student loan payment is $400/mo, which people for whatever reason still aren't expected to resume repaying, regardless of their total income.

Chill out repayments resume in August.

Just like the last time payments were set to resume. I'll believe it when I see it. This administration takes inflation "very seriously."

+1

They will resume. The whole loan forgiveness question has been divisive and it is getting too late for them to change course now.

[Anonymous]

For me, a low earner, it's the rent. My studio already went up $220 a year in 2022. So did electric. It was hardly ever over $30 in 2021/22.
Mid 2023 my studio is going up another $330. I was also told that my electricity, which is metered separately, is going up another $100. This is per leasing company, not per pepco. So, not sure whose electric I need to pay.
If you are poor, you don't ask questions, but pay or move. I decided to move, because I should be able to get a 1-bedroom in NW (my kid's school is here) for less than the $2350 I have to pay for the studio in total. Moving is not easy or cheap, but the raise is just too high.
1-bedroom I looked at requires $81k income. I have never made that much. Not easy to be low income.
I absolutely feel the rent increase. I need 5 week months to pay for it.

[Anonymous]

Anonymous wrote:For me, a low earner, it's the rent. My studio already went up $220 a year in 2022. So did electric. It was hardly ever over $30 in 2021/22.
Mid 2023 my studio is going up another $330. I was also told that my electricity, which is metered separately, is going up another $100. This is per leasing company, not per pepco. So, not sure whose electric I need to pay.
If you are poor, you don't ask questions, but pay or move. I decided to move, because I should be able to get a 1-bedroom in NW (my kid's school is here) for less than the $2350 I have to pay for the studio in total. Moving is not easy or cheap, but the raise is just too high.
1-bedroom I looked at requires $81k income. I have never made that much. Not easy to be low income.
I absolutely feel the rent increase. I need 5 week months to pay for it.

I absolutely feel this! I’m in a rent control building but my rent still went way to this year since the council set rent increases at 9%! And in my case daycare is raising tuition too. My income can’t keep up. I’m also planning a move but like you say, moving is expensive and complicated when you also have little kids/pets.

Good luck, PP. I hope you find a reasonable place.