What You Need To Know About The Cost Of Living Increase

As we reach the halfway point of the year, it’s natural to start wondering how things will look by the end. And, of course, one of the main things people are worried about is the cost of living. With inflation on the rise, it’s no surprise that prices for groceries, housing, and other essentials are going up. In this article, we’ll tell you everything you need to know about the cost of living increase – and how you can prepare for it.

It’s that time, and it comes (almost every year).  You may know what I’m talking about-the annual (not so) great cost of living increase.  Because I’m a federal pensioner, I get two of those little increases, one of which begins in April.

Don’t get me wrong, extra money is extra money, no matter how small the amount. It’s just that I have a difficulty finding something specific to do with it, if you know what I mean.  Pre-retirement, the difference in income was usually bigger and it usually got assigned to a specific category. The difference might be put into savings, travel or towards another specific goal. At this point in my life, I’m not finding a specific category to put this very small slush fund into-meaning it will probably turn into what the financial experts call “blow money”.  Which of course, is not a bad thing as such.

Cost Of Living Increase

This year, I have a slightly larger increase that the normal few dollars. Social Security increases my income by $28, and my federal pension will increase by a whole 17 bucks. No big spender am I, obviously, with that increase. However, another increase has also crossed my financial desk.  You see, my college student has turned the magic age of 26. While he was paying all his other bills, I was still paying that fee because it came out of my federal pay-and because he is trying to start a business. 

My son has now joined the ranks of folks signed up for the affordable care act.  In the federal system, there is generally single health care and family health care. So the fee I was paying when my husband was living did not lower, as long as my son was on my insurance.  That amount was $150, which means my health care deduction is now only $100 instead of $250. So there you are, Instant income. I certainly will not argue!

For those who might wonder, my very semi employed college student did not qualify for medicaid or any subsidies (probably because he is living in this house although completely emancipated).  He qualified for the Colorado Co-op health insurance.  He is paying the same amount I was paying before. Although his total deductible is much higher than my health insurance, there are many things that are completely free-including many prescriptions, all vaccinations, prenatal health care (no help to him but…) most so called well and preventative appointments.  Since he is an overall healthy young person (albeit with a former history of asthma, leaving migraines and pneumonia as regular occurrences), this seems to be a realistic option for him both in terms of monthly costs and copays.

So what have I decided to do with the money?  I’ve decided to spend it on me. As someone who has chronic pain, and is not good about doing things for herself, this money will be spend purely on luxuries. A regular massage, a couple expensive supplements to help naturally deal with pain, a more expensive hair stylist, I’m sure you get the picture.  In truth, these are things that were often affordable before, I just simply chose to spend money on the house, or fabric, or something else.  This is a way to remind myself to do these things, as well as it is a better way to fund them.

Meanwhile, my last few days of retirement have been full of those need to do, less than exciting tasks that occasionally come up in groups.  I’ve helped my son design business cards, cost out landscape equipment and evaluate used trucks for his business. I spent time vacation plannig -booking hotels, printing out maps, looking at the (at least) three alternative ways to travel to Seattle.

Now that those chores are out of the way, it’s time to return to designing that quilt, hitting at least one movie this weekend, and hitting at least one local seafood restaurant. No more retirement must do’s-at least for a few days!

It’s always difficult when something as important as the cost of living increase hits our pockets. With prices constantly on the rise, it’s hard to find a break in the action. But fret not, we’re here to help you make sense of it all. In this blog, we’ll be discussing some of the most important factors that go into calculating the cost of living increase and how you can prepare for it. We’ll also provide you with a few tips on how to budget for this inevitable expense and make sure that you’re not impacted too much by it. Stay tuned for more updates!

Frequently Asked Questions

Who is affected the most with the increase in cost of living Why?

The constant rise in prices has a negative impact on fixed income earners such as seniors, daily wage earners, manual employees, small sellers, workers in small businesses, and workers in low-paid private occupations. The actual income is the income of consumers adjusted for current inflation.

Does cost of living increase with inflation?

Inflation measures the increase in the price of goods and services. Or, the decrease in the buying power of the dollar. Cost-of-living measures the change, up or down, of the basic necessities of life, like food, housing, and healthcare.

What is affecting the cost of living?

The constant rise in prices has a negative impact on fixed income earners such as seniors, daily wage earners, manual employees, small sellers, workers in small businesses, and workers in low-paid private occupations. The actual income is the income of consumers adjusted for current inflation.

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