Adjusting the Budget for Inflation

Hubby and I had a little budget meeting Saturday (which was when I discovered the math errror and possible overdraft charges) and discussed where are money is going for the month.  We raised two budgeting categories for the month of April: groceries and gasoline for the car and truck.  Both of these budget items are growing and taking a bigger bite out of our monthly money.

It’s beginning to remind me of the 80s comedy-musical-movie Little Shop of Horrors (which hubby found online a couple weeks ago) and the alien carnivorous plant Audrey Two.  At the beginning of the movie, Audrey Two is small and satisfied with only a few drops of blood from Seymour, but as it grows it demands more and more (and talks and sings as well).  (Trivia: the original version of the movie starred a very young Jack Nicholson and was supposed to be a serious horror movie.)

Back to the budget - the grocery and gasoline allocations are starting to grow.  With gas locally at $3.219 per gallon yesterday, it is taking about $50-60 per week for hubby to fill his truck (resisting the urge to make a snide remark about how we should have sold it…) and $29-34 to fill my Pizza Taxi per week.  This is up from $45-55 for hubby’s truck and $26-31 per week for my car just a few months ago, and WAY up from last year.  It is almost as if the vehicles’ gas tanks and the gas pumps are whining “Feeeeed me, Seymour!”

As for food, I have upped the amount to $140 per person in the grocery section of the budget, from about $120 per person at the beginning of the year.  There is no imagining things, both hubby and son DO come up to me every late afternoon or early evening and say “Feeeeed me, Seymour!” in a voice mimicking the plant in the movie.  It’s humorous, but I can’t help but wonder if I’ll have to prick a finger to accomplish this at some point.

Now, to get a bit political: you won’t see anything about this from any official government report.  They intentionally strip out food and energy prices from their inflation calculations, which means the Fed will feel it is still safe to cut the interest rates because they can claim “inflation is under control right now.”  All I can say is 8 of the 10 members of the FOMC must not eat or drive anywhere if they can say inflation is under control with a straight face.

Other countries’ central banks are raising the interest rates and watching (accurate) inflation numbers with concern (Aussie example here).  So, why can’t our Fed do the same?  Ben Bernake testified last week that a recession is a possibility, and last time I checked, recession + inflation = STAGFLATION.  What in the world are our “financial leaders” trying to do to us??  Everyone on the FOMC is old enough to remember the 70s and how ugly that was … so why is it beginning to look like they are intentionally trying to bring back stagflation?

For another movie reference, I am reminded of the scene at the drive-in about the middle of the movie Twister.  One of the storm chasers hops out of the van after checking the weather radar on the laptop, screaming “It’s coming right for us!”  The hero of the movie grimly announces: “No, it’s already here!” as the storm begins to take apart the drive-in’s movie screen.  I’ve been grumbling recently about inflation coming, and this month’s budget numbers seem to suggest: IT’S HERE ALREADY!  In this house, we’re feeling it at the gas pump and in the grocery store checkout.

How about y’all: Are any of you feeling the effects of inflation in your budget?  Is there a budget category that’s whining “Feeeeeed me, Seymour!” for you?  Do you think the government’s official inflation figures are wrong?  Do you feel like we are headed into some ugly stagflation?  Or do you think I am being too much of an alarmist?