I had a surprise today, reviewing what we spent in various categories of ordinary household expenses last year. The last time we conducted the same review was on expenses for 2005.
Shocker! Our ordinary food costs, excluding meals out, and excluding wine/beer, were about fifty percent - 50% - higher in 2011 than in 2005. This increase occurred even though, as we age, we tend to eat less (smaller portions and fewer big meals), consistently shop price, and seldom buy anything that isn't "on sale." One might be tempted to think there was a miscalculation somewhere, but I really doubted that; we have very good, thorough data for this in our financial software.
So, looking a bit farther, I ended up at the FAO website (via the intermediary of "ThinkProgress.org"). The FAO publishes a monthly index of world food prices. It's worth a look. It confirms not just that prices have gone up, but actually by far more than just 50%; comparing the average index number for 2005 (117) to that for 2011 (about 225) in fact, the FAO index suggests that costs have gone up by over 100%. I guess we can congratulate ourselves on keeping costs down as much as we have!
Food costs have increased more than any other category that we consider. A related category for dining out shows an uncannily similar increase - about 50% - even though we consciously go out less often than we used to. And while the media love to stir us up with almost daily reports that the cost of gasoline is up another penny or two, it's interesting to note that we paid only about 26% more for gas in 2011 than we did in 2005, for the same amount of driving. These data suggest we ought to be paying more attention to those occasional reports about food increases, and less to those almost daily ones about gasoline.
Still, as retirees, we have felt the effects of these rising food costs in the form of feeling frequently pinched, without consciously discerning to what to attribute it. Other expenses has risen too, and far more quickly than our retirement income (even though the latter is somewhat buffered by cost-of-living increases).
This insidious cost creep affects everyone, but it's particularly serious for seniors, and more so for seniors at marginal income levels. It has some clear implications for the future of social security and current talk about altering its cost-of-living calculations downward.
Yay!!! I don't know how I didn't see this eailrer! Add a box of Annie's Organic Mac & Cheese for me!
Posted by: Floriana | February 13, 2012 at 11:12 AM