Personal P & L

I know most people don’t keep a budget, but most know if they have money at the end of the month or not.  Let the following example help you understand the current economy. 

Suburban Family 2005

All numbers are AFTER-tax because that’s all that really matters.

Income:  $6,250 per month $75,000, dual or single income family

Cost of Living:  $5000, rent/mortgage, food, cable – EVERYTHING

Toy/Entertainment Budget $1,250

 

40% INFLATION

(ex. eggs go from $1.49 to $2.09, gas from $1.95 to $2.73

Suburban Family 2009

Income: $6,250 per month (assume wages have been stagnant since 2005)

Cost of Living: $7,000 (40% growth of $5,000)

Toy/Entertainment Budget: negative $750

 

What if inflation has been worse then 40% cumulative since 2005.  gas per gallon has gone from $1.74 on January 3rd, 2005 to $ 3.64 on September 29th, 2009, over 100% increase.  Have you noticed anything else that has doubled in price the last four years? 

So not only do we have irresponsible borrows to blame, but any responsible person who is now being pushed into poverty by inflation is hurting the economy.  No one is sending them $700 billion dollars.

Trickle down may not work, but the market is telling us that trickle up is working just fine.  The push down exerted on the middle class is bringing down some in the upper class finally.  But the more we focus our energy and resources on the wrong problems the deeper we all get. 

And you think the current government is going to help.  Arrow Shafts and Rum; get drunk and teach your children to hunt squirrels.

Well, at least the squirrels are free.

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2 responses to “Personal P & L

  1. I put out there a bare bones budget for a family at peoplepowergranny.blogspot.com. This kind of thinking has helped me as I raised my family of five kids over a period of some 40 years on a limited income. I think most Americans spend way too much on wants that they think are needs. Readers can also vote in my poll on how their families could cut back even more to prepare for uncertain times ahead.

  2. If most American’s stuck to a budget a lot of companies wouldn’t exist. I’m thinking of ones that charge monthly for obvious non-necessities.

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