I feel like the topic of inflation is one of those things that the media is under contract to mention just once per year. It’s often tucked behind a quick blurb on social security cost of living adjustments, which are released annually in October. I have used the postage stamp in the past as a way to illustrate this concept that the things you want/need to purchase today, could be more expensive when you go to purchase them tomorrow, next year, next decade and so on.
In more recent memory, with the exception of health care, child care and college tuition prices in the United States have been relatively stable. I do have a more personal gauge of inflation, like a running joke with one client (who I hope is reading this) about the price of the “Ultimate Chocolate” cake from Wegmans, or the pound of bacon I DIDN’T buy the other day from Tops, but on the whole things have been stable.
Since recent memory isn’t going to help, let’s pop back to a time when prices were on the run, such as the 1970’s:
| Year | Inflation Rate YOY |
| 1970 | 5.60% |
| 1971 | 3.30% |
| 1972 | 3.40% |
| 1973 | 8.70% |
| 1974 | 12.30% |
| 1975 | 6.90% |
| 1976 | 4.90% |
| 1977 | 6.70% |
| 1978 | 9.00% |
| 1979 | 13.30% |
| 1980 | 12.50% |
| 1981 | 8.90% |
An item that cost only $10 in 1970 cost $24.92 by the end of the 12 year period ending 1981. Imagine that every few months when you go to the grocery store milk is $10 cents more per gallon? The little league for your kids is up $15 more than the year before? The camp site you’ve rented for the past 10 years is up another $100 for the week? You call the owner and the answer is simple, “My costs went up, so your price went up.” This increase in prices starts to ripple throughout people’s lives. The worst part, it can be sneaky. It’s not painful at first, as much as it is annoying. You don’t notice the pennies here, or the dimes there, but over time those pennies turn into dollars which in time turns into a serious loss of purchasing power.
The ways in which you combat inflation, or invest your dollars to ideally keep pace with inflation, is a post for another day. My goal is to present the idea that despite its lack of media attention, inflation is still here and the first step is to keep an eye out for it. Don’t make yourself nuts, but put an extra 5% effort into noticing the price of the things you are buying so that if the inflation train leaves the station, you know what the ticket used to cost.
Happy Friday! Stay safe, be well!