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.

1. “People” probably have a different income than you.
2. Some people (like myself) refinanced. My PITI is 1900/mo on a 500-600k income. We have a ton of w2 cash flow.
3. Only way inflation has his us is we had to save more this year to buy an investment property than we had planned to off set the interest rate and keep our mortgage below rental income.
4. I have no idea what prices on what items have gone up. Not gonna lie I don’t pay attention.

We almost stopped eating out since the pandemic . The money saved is probably more than the increase in groceries. So we don’t really notice a difference.

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.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think it's a combination of things:

1. People's habits become ingrained so they don't stop eating out or buying new stuff even when their disposable income drops.
2. People with mortgages prior to the pandemic (or paid off homes ) are in much better shape than everyone else. UMC people in this category don't really need to cut back.
3. The wealthy get a lot of free stuff due to their business and personal connections. Then regular shmoes pay for goods and services to be like the wealthy. But they're not really like the wealthy because the shmoes are paying so the wealthy don't have to.

The bolded is something that does not get discussed enough.

+1
It takes energy to shift habits. People who had sufficient buffers in their income just let the cost drift upwards. People who don't accumulated savings during Covid by not going out that they are slowly burning through, likely without noticing. Sooner or later more people feel the pinch.

OP here. Maybe this is it. Our mortgage stayed the same, and we kept our retirement/savings/529 monthly deductions the same. So the amount we have left after those things each month is the same. But since every single other thing in life has gotten more expensive (groceries, insurance, travel, clothes, kids activities) we've had to make adjustments almost everywhere else. I'm just shocked how many people we know bought a fancy new car during the car shortage and got a fancy new home remodel during the lumber shortage. Like - the most expensive time ever to do either thing and they are like "whatevs, its fine."

Cars were being given away with 0% financing in 2020
Heloc rates were record lows and so were cash out refis
And the stock market doubled in 2 years

No not then. Later, during the chip shortage, the lumber shortage, and the major jump in interest rates.

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.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think it's a combination of things:

1. People's habits become ingrained so they don't stop eating out or buying new stuff even when their disposable income drops.
2. People with mortgages prior to the pandemic (or paid off homes ) are in much better shape than everyone else. UMC people in this category don't really need to cut back.
3. The wealthy get a lot of free stuff due to their business and personal connections. Then regular shmoes pay for goods and services to be like the wealthy. But they're not really like the wealthy because the shmoes are paying so the wealthy don't have to.

The bolded is something that does not get discussed enough.

+1
It takes energy to shift habits. People who had sufficient buffers in their income just let the cost drift upwards. People who don't accumulated savings during Covid by not going out that they are slowly burning through, likely without noticing. Sooner or later more people feel the pinch.

OP here. Maybe this is it. Our mortgage stayed the same, and we kept our retirement/savings/529 monthly deductions the same. So the amount we have left after those things each month is the same. But since every single other thing in life has gotten more expensive (groceries, insurance, travel, clothes, kids activities) we've had to make adjustments almost everywhere else. I'm just shocked how many people we know bought a fancy new car during the car shortage and got a fancy new home remodel during the lumber shortage. Like - the most expensive time ever to do either thing and they are like "whatevs, its fine."

Cars were being given away with 0% financing in 2020
Heloc rates were record lows and so were cash out refis
And the stock market doubled in 2 years

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think it's a combination of things:

1. People's habits become ingrained so they don't stop eating out or buying new stuff even when their disposable income drops.
2. People with mortgages prior to the pandemic (or paid off homes ) are in much better shape than everyone else. UMC people in this category don't really need to cut back.
3. The wealthy get a lot of free stuff due to their business and personal connections. Then regular shmoes pay for goods and services to be like the wealthy. But they're not really like the wealthy because the shmoes are paying so the wealthy don't have to.

The bolded is something that does not get discussed enough.

+1
It takes energy to shift habits. People who had sufficient buffers in their income just let the cost drift upwards. People who don't accumulated savings during Covid by not going out that they are slowly burning through, likely without noticing. Sooner or later more people feel the pinch.

OP here. Maybe this is it. Our mortgage stayed the same, and we kept our retirement/savings/529 monthly deductions the same. So the amount we have left after those things each month is the same. But since every single other thing in life has gotten more expensive (groceries, insurance, travel, clothes, kids activities) we've had to make adjustments almost everywhere else. I'm just shocked how many people we know bought a fancy new car during the car shortage and got a fancy new home remodel during the lumber shortage. Like - the most expensive time ever to do either thing and they are like "whatevs, its fine."

Anonymous wrote:

Anonymous wrote:I think it's a combination of things:

1. People's habits become ingrained so they don't stop eating out or buying new stuff even when their disposable income drops.
2. People with mortgages prior to the pandemic (or paid off homes ) are in much better shape than everyone else. UMC people in this category don't really need to cut back.
3. The wealthy get a lot of free stuff due to their business and personal connections. Then regular shmoes pay for goods and services to be like the wealthy. But they're not really like the wealthy because the shmoes are paying so the wealthy don't have to.

The bolded is something that does not get discussed enough.

+1
It takes energy to shift habits. People who had sufficient buffers in their income just let the cost drift upwards. People who don't accumulated savings during Covid by not going out that they are slowly burning through, likely without noticing. Sooner or later more people feel the pinch.

Many (perhaps most) people do not plan ahead or keep a budget. I agree with the ingrained habits poster above that people haven't adjusted and likely because they either don't have a budget so are unaware of costs/lost savings or they think this is a temporary situation so why bother making changes now.

More companies are announcing layoffs every week. Subsidies ending...people can coast for a while including through severance packages but at some point the money will truly run out and reality will hit. Until then...some do not bother to make changes or plan and perhaps that is what you are seeing.

Anonymous wrote:I think it's a combination of things:

1. People's habits become ingrained so they don't stop eating out or buying new stuff even when their disposable income drops.
2. People with mortgages prior to the pandemic (or paid off homes ) are in much better shape than everyone else. UMC people in this category don't really need to cut back.
3. The wealthy get a lot of free stuff due to their business and personal connections. Then regular shmoes pay for goods and services to be like the wealthy. But they're not really like the wealthy because the shmoes are paying so the wealthy don't have to.

The bolded is something that does not get discussed enough.

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

+100 this is it.

So many people who are not wealthy or affluent grapple with accepting and understanding there are people (the asset class in this nation) are not affected by inflation or housing prices.

Isn't this just a have and have not story playing out?

I mean I don't even have the astronomical income of the DCUM crowd, yet I feel lucky to have the capital I have. I mean if you were invested in the market pre pandemic say year end 2019, you are up 28% since then just in the S&P even after accounting for last year's down market.

I and many others here also have jobs where we worked from home for 2+ years, many for 3 years. For me that has been 2-3 years of not getting lunch out daily, no commuting cost, no dry cleaning cost, and rarely filling my tank as I'm not driving daily. That's a whole lot of savings for 3 straight years.

Add to that that we were among the few that stayed covid cautious - didn't vacation for 3 years. We don't usually vacation 4 times/yr like most of DCUM but still it's usually 5-10k spent per year on travel that wasn't, so there's another 15-30k. And we just opted not to do "compromise" trips that were weren't interested in like driving to the beach in North Carolina or something and paying 5k for a house for a week.

That extra capital from 3 years of work + vacation savings has to go somewhere - so guess what it goes into 5% Treasuries where it grows more. And this says nothing of raises received which while not huge on a yearly basis are still ahead of the aggregate inflation we've experienced from April 2020 to today.

Anonymous wrote:

Anonymous wrote: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.

Yeah this. I got a 10% raise last year going from 270 -> 300k but most of my expenses are not affected by inflation (mortgage, auto loan, etc). Expenses only went up a few thousand at most last year.

Your post shows the inflation has significantly different effects on the haves and have nots. Let's consider two incomes:

100k

250K

10% increase is 10k versus 25k. On the 250k income that 10% increase will cover the everyday inflation in food and transportation costs and utilities. And you still come out a bit ahead. But not for the 10k increase family. Inflation in food costs is enormous and very real and that is what people who are homeowners still faced over the last two years. The higher incomes gain the most with inflation because their salaries go up faster as they have more to start out with. But the middle and lower classes have less, and have smaller increases. Which means the inflation for the core basket of goods hits them harder.

Anonymous wrote: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.

Yeah this. I got a 10% raise last year going from 270 -> 300k but most of my expenses are not affected by inflation (mortgage, auto loan, etc). Expenses only went up a few thousand at most last year.