Death by a thousand economic pecks

[CoffeeCat]

I'm our family "financial manager." I pay the bills and I keep us on budget. I have
kept monthly logs of our expenses, for many years and I have noticed a trend.

Our family finances are being pecked at from multiple directions. I look at our budgeting notebooks from ten years ago--my how things have changed! I sense that most families
in America are experiencing economic "pecks"--that chip away at financial security, the ability to save money and consumer buying power.

Here are some of the "pecks" that have impacted our family budget and spending/savings
habits. Some of these "pecks" are big and some small--but they all add up to drastic
changes for our family. Maybe your family has experienced some--or many of these pecks?

It's evident--that collectively--Americans are being financially pecked and that this
is wreaking havoc on our economy.

Peck #1--My husband was employed by the same company for ten years. During the 2008
downturn, he was asked to take a 30 percent pay cut. He had no choice. Who wanted to be
employed during that economic Dante's Inferno? The result was decreased savings and shock to our budget. Our spending NEVER returned to pre-2008 levels.

Peck #2--My husband was laid off in 2010 for six months. He found work, but across the board
salaries in his field have decreased. He actually secured an upper-management job in his
tech field--which was a promotion. However, the pay was 15 percent less than his previous
salary. This has permanently shrunk our disposable income and contracted our spending.

Peck #3--We're paying more for health benefits. Ten years ago, we paid nothing for health
benefits. We had very low co-pays. Slowly, corporations have decreased their contributions
to employer health benefits and now we pay $400 for health coverage and our co-pays and Rx fees
have tripled. That adds up--big time.

Peck #4--Our grocery budget has doubled. Yes, I said doubled. I don't give a rip what the experts say about food prices. The prices for many foods has increased by 30 percent. I've seen some items double in price. I am an avid couponer and I keep a notebook of food prices. I even write down
product sizes and I actually price out toilet paper by calculating the price per sheet! So, don't tell me that we're dealing with 2 percent or even 5 percent food and grocery-item increases. There is real food inflation out there. Packages have shrunk as well--which adds up to a big cost increase.

Furthermore, manufacturers are very stingy with promotions. Used to be you could combine coupons with weekly sale prices. It's rare to find great deals now on products for which you have coupons. I used to save 50 percent on my grocery budget with coupons. I now save 20 percent--if I'm lucky. And again, I'm one of those crazy coupon people with a big box full of categorized coupons. I used to spend $300 per month on groceries and I had a huge stockpile and gave loads to charity. Now, I spend $600 and I don't stockpile as much.

Peck #5--Gas Prices. I think many forget that in 2005--gas prices were around $2 a gallon. Now, we're in the mid $3 range. We're paying $100 more a month for gas than we were several years ago.

Peck #6--Our water and energy bills have increased. In the past six months--we've received letters telling us that our energy and water bills will be increasing. This will translate to a $30 monthly increase in our budget. Yes, that's small, but it's another "peck" that chips away.

Peck #7--The interest rates on savings accounts are a joke. Two percent, if you're lucky. People are almost discouraged to save with these pathetic rates. However, we need to save--in this uncertain economy.

Peck #8--We've been in our home since 2005 and our home value has decreased. If we sold
our house now, we might break even--after paying on it for seven years. We have no equity
and if we needed to move, this would be a strain. Used to be, that people moved and they
rolled their equity into a down payment on their next home. Most do not have that leverage now.

I'm sure there are many other "pecks" that people are experiencing that damage your economic
security--little by little. I think all of this "pecking" is the reason why the middle class sectors cannot
get ahead or feel safe and secure--and why the economy is sputtering. It's not just high unemployment--it's diminishing salaries and so many increased costs that are "pecking" us all
into a tighter economic corner.

[safeinOhio]

1. Think how funny it would have been

30 years ago if someone said, some day it would take a credit card to buy a drink of water or to put air in your tires at the gas station.

[CoffeeCat]

2. Don't get me started about credit cards...

Many people use them to get by. However, they will rob you of your wealth--as
you pay interest on everything.

Very, very few people pay off those balances every month. Credit cards enslave
people to the evil banks.

It is another way that people are being stripped of their financial freedom
and security.

[zipplewrath]

10. Actually

Very, very few people pay off those balances every month.

Actually, I've heard it runs around 40% of card holders do.

[Sirveri]

16. the air pump thing REALLY pisses me off.

I mean they seriously can't just give us air, we have to pay for every freaking turn of the compressor now?

[JDPriestly]

3. It's all so true that it leaves me speechless.

Why isn't this topic number 1 on the news?

So far, the only group that has successfully brought these kinds of facts to light is the Occupy group. And look at the way the government treats the Occupiers.

The silence in our media and at the top levels of our government about the way we are being crushed economically is very troubling. Is there official complicity in this?

[sinkingfeeling]

4. It's a global shake down of people by corporations/banks/governments.

Think about the common folks in Greece being told they must take a 30% cut in their pensions and salaries.

[raccoon]

5. One main peck is that so many people who lose "good" jobs have to settle for crappy jobs with much

lower pay and possibly no benes.

There are fewer and fewer "good" jobs out there. It's like a game of musical chairs.

Rec'd.

[sarcasmo]

6. Cost of goods is higher and wages lower. The 1% are turning this country

into the slave labor source that it wants.

[JHB]

7. Bookmarking. (BTW, you have 8 pecks there, you numbered two of them #4)

[grasswire]

8. I have figured out the racket at my local Kroger store

Their best prices and coupons are offered on the second and fourth weeks of the month -- the weeks when most people do NOT get paid.

The effect?

When more people have money in hand, store prices are higher. When people have less money in hand, the weeks before paydays, the sales are better.

This means that it's not as possible for people with less income to take advantage of the sales, or to stock up.

[LiberalEsto]

9. More pecks

Looking at our bills, I see we pay almost $30 ($29.46) a month in federal, state and county taxes in them, which translates to around to $350 a year. We also pay state sales tax, state income tax, county income tax and property tax, as well as the federal income tax.

I'm not an anti-tax nut; I believe taxes are the price we must pay to live in a civilized society. But I don't think we got hit with so many little extra taxes on our bills 10 years ago. And don't get me started on the gas tax -- Maryland's governor wants to raise it by 18 cents per gallon. I don't know how people can afford it.

It really angers me to see the 1% getting away with paying little or no income taxes at all. This is probably why we're being gouged with all these little taxes - to pay for state and county needs that used to be covered by federal funds.

Phone, cell, internet and satellite tv bill:

Maryland gross receipts tax surcharge .21
Telecommunications Access of Maryland Fee .18
MD Gross Receipts tax surcharge .73
Montgomery County access line tax surcharge 2.00
Federal Universal Service Fee (long distance) 1.34
Federal Universal Service Fee 1.01
Federal excise tax .26

Gas bill:

State and county surcharge 11.49

Electric bill:

Maryland Environmental surcharge .11
EmPower MD charge res. (?) 1.40
Gross receipts tax .50
Montgomery County energy tax r es. 10.23

[JHB]

13. That's exactly it: revenue down from business activity...

...thanks to recession, offshoring, lobbying, tax abatements, etc., gets made up from other sources, preferably ones where the increase is easier to hide (fees and surcharges of all types) or where the political costs of hiking it further are relatively low (tobacco, booze, etc.).

[raouldukelives]

11. Here they recently adopted a "standard water useage amount"

of 1000 gallons. We've managed through reusing some water and the "if its yellow, its mellow" approach to many times come in much less than a 1000 a month. Now we are we being charged for a 1000 even if we don't use it.
All the water company says is "Well, make sure to use all your water."
They remove any impetus for conservation when we are suffering one of our worst rainy seasons in recent memory. All to keep the profits rolling in.

[TBF]

12. I haven't kept track as you have (which I think is awesome by the way),

but I've noticed the same trends. And we are fortunate to still have good income (and accompanying student debt, so we certainly will not be out yachting with Mitt anytime soon ...). But we can generally pay our bills, see doctors, even take a few yearly vacation, and I have stayed home the past 5 years. But even in the professional classes we are getting hit - parking at work that used to be free but now costs, same with tuition reimbursement in many companies - these are the programs that get cut first when there are budget woes. Health insurance has gone through the roof the past 10 years. I remember working in companies through the 90's and paying nothing for myself and then a small amount for family - now we pay over $1000 per month just for the coverage before any deducts/copays. Anything we are doing that is service related is expensive - carpet cleaning, car maintenance, etc - my guess is that a lot of folks are doing those things only if they absolutely must so the small businesses are charging more for service just to keep going. Monthly bills are high - water, cable, electric and have certainly noticed the increase in grocery costs. Clothing and related costs are high - again I think they've adjusted inventory for those who are still buying and charge more because they have fewer folks to sell to.

The list goes on and on. And the sad part is that I look at Greece and hear about how they are being forced to take a 22% cut in their minimum wages and know that we aren't even at that point yet - and I know it is going to be worse before it gets better. And that is not to say that our president hasn't stimulated the economy because he certainly has - but the repugs are blocking everything the wealthy don't like and the new jobs being created are not high income. If we get hit with another 8 years of someone like Romney I wouldn't be surprised to see buildings burning here too. People can only take so much.

[kickysnana]

14. My sisters daughter's careful college fund lost money for them...

She was here and they had just done taxes and had been afraid that their daughter would have a tax bill on the money her education fund earned, started when she was born. She said this this weekend, "We would have been much better off putting the money in a mattress." They have 6 kids and I hope she gets the connection between the GOP, the 1% and her kids college funds.

[Yo_Mama]

15. This is a very good post

Yes, you're right about the prices. Most people are deeply affected by food, transport and medical cost increases.

The official consumer inflation rate has little to do with reality, because the official inflation rate tracks pricing rather than net cost to consumers (eventually it will catch up, but it takes years).

I was fascinated to read of your food logs. I also have a food price index that differs massively from the official federal one. Your numbers are much closer to my numbers.

In economic terms, what you are explaining about your family's experience is that your discretionary income has plummeted, and this has widespread economic effects.