As noted by many folks, on the pages of this blog and throughout the automotive industry, the price of oil and gas is impacting much more than just folks' monthly gas bills. This week's Automotive News
is drenched in stories of increased supplier costs
- all at a time when car sales have evaporated and prices are being driven down by plunging demand.
More expensive production costs paired with falling retail prices? That's about as bad as it gets, and not just for automakers but for any retail outlet. Steel prices have been spiking upwards for a couple years, but now oil prices, and everything oil goes into, are skyrocketing. Think about all the products we buy that involve plastic and rubber - both heavily dependent on oil as a fundamental component? Of course even things that don't involve oil in the manufacturing process, like milk and bread, have to be shipped. I saw a news story last week about the price of food in Hawaii. I think a peanut butter was somewhere around $8 a jar!
So the question today is: How are rising oil prices affecting you beyond your vehicle/commuting costs?
To be honest, I haven't seen huge shifts in my personal expenditures, though my wife confirmed the recent jump in food prices, (bread at $4.59 a loaf annoys her, though she suggest avoiding mainstream chains and shopping at alternative grocery stores). I was able to purchase a one-way flight from Los Angeles to Denver last week for $114, which seems pretty good. But my friend is trying to take his family from Denver to Orlando for a vacation, and he confirmed the airfare prices almost cancelled the trip. Of course my energy costs seem ludicrous. I even checked into solar, and when the solar rep looked at my bills and my house/family size he said $140 a month in electricity is actually pretty reasonable. Not sure if that should make me feel good or bad.
How about you? What are your tales of non-automotive price spikes.
By ahightower
on July 1, 2008
09:01 AM
Definitely the food budget. Eating out less, and when we do go out it's to less expensive places. My wife has taken up the challenge and has been clipping coupons and browsing the circulars to plan a weekly menu based on what's on sale rather than just what we're in the mood for. There are some things that only name brands will do, and some things she prefers organic. But a lot of stuff is going generic. She saved 29% ($57) last week. After all that work, we're basically spending about what we used to spend two years ago without really trying.
By syke
on July 1, 2008
09:10 AM
Ditto on the food budget. I came into the year budgeting $85.00/week for the wife and myself. That's currently up to $100-105.00 - and a week of $120.00 is nowhere near as rare an occurrence (sp?) as I'd like it to be.
I'm off-setting it a lot by keeping my monthly gasoline expenditures at $100.00 less (yes, less) per month than last year. And I'm driving as much as I always have (can't exactly make the commute shorter unless either I or the job moves). The trick? 99% of all my commuting is now done by scooter and bicycle. The pickup gets one tankful a month - period.
By norcalplanner
on July 1, 2008
10:25 AM
Ditto again on food. The cost of both groceries and eating out are creeping up, making our family lean much more toward shopping at discount grocery stores and eating in more often.
By ewilfong
on July 1, 2008
11:21 AM
We've seen only a small increase in our grocery budget (aside from the hit taken from having a baby). I recall when we moved to C(r)ook County from Texas in 2005, we saw a pretty considerable increase in food costs. We suddenly had to pay $4/gallon for store-brand milk where we had been paying $2.50. Eggs cost about $2/dozen, compared to as little as $.79 in Texas. Prices dipped over time, and they are certainly trending upward, but perhaps because we were cowed into becoming more careful shoppers initially, we haven't noticed a huge difference in the final bill.
I do miss the days when using gas for cooking and home/water heating meant really low energy bills.
By carlisimo
on July 1, 2008
12:21 PM
Karl, losing the links to the other Edmunds or Insideline blogs that were on each blog page is a bummer. I hope that's not permanent.
Gasoline itself hasn't affected me since I've been commuting by light rail. But the price of rice has doubled (plain CA-grown rice, not the long-grained rice that there were shortages of), and that of some fruit. At home we also buy some ingredients imported from Spain (music CD's too), and the dollar sucks versus the Euro.
I'm more worried about how steel prices are going to affect my job in structural engineering. We're a good enough company that we'll we're not expecting to run out of work, but whenever the economy tightens up the contract terms do too.
By blueguydotcom
on July 1, 2008
12:44 PM
No change really. We lived fairly frugally before the economy took a dump. In fact we've injected quite a bit into the economy recently as my wife insisted we remodel our kitchen. While everybody is saving, we're using off-time contractors, carpenters and electricians, etc to get renovations completed for low prices. If you have the money in savings or a steady income, now is the time to redo your house. We're getting work done at 40-60% off the prices skilled craftsmen normally charge. There's so little new construction that unless these craftsmen are involved with repairing foreclosures, they're hard up for work.
By sylvia
on July 1, 2008
01:00 PM
carlisimo - links to other blogs will be back, probably later today.
As for cutting back - YES! We rarely ate out before. I'm clipping coupons, paying down debt and scrounging for $ and hitting the personal finance / budget and discount blogs.
By bepperb
on July 1, 2008
01:00 PM
Actually it hasn't mattered to me one bit.
Hang on one sec, just got my 401k statement in the mail.
Holy #$%&*, I gotta go...
By mnorm1
on July 1, 2008
02:48 PM
Food, like most everyone else here has stated.
We haven't made many changes; other than complain.
But I also do myself a favor and don't look at the utility bills - let the wife handle those.
By opfreak
on July 1, 2008
07:47 PM
this sign in this is weridddd. last time I tired I got redirected to who knows where.
gas has had no real 'direct' impect on us yet.
yes everything costs more, but we live close to work ~4 miles, so the fuel costs are low.
Plus we are still living close to our old college style budgeting,
our expenses are ~50% our take home income, the rest goes into fun and savings.
long term though, instead of a sporty car, i'll probaby end up with something with good gas milage, figures that as soon as I can afford it. I'd rather not spend the money on gas.
unlike firstwagon, I belive gas prices >=4 dollars a gallon are here to stay, and 5-6 dollar a gallon gas is easy to see. I'm just hoping the path to 6 dollar gas, is more gradual then the path to 4.
By sylvia
on July 1, 2008
08:31 PM
I agree that gas prices are here to stay... as are higher milk prices, bread and more.