Picking up Nickels

Wednesday, December 21, 2011

Grocery price inflation update

It has been exactly one year since my last grocery price inflation update.

Through November 2011 I have seen the largest growth rate in grocery spending (17.4%) that I have experienced since I actively changed my grocery shopping strategy to reduce costs more than eight years ago. In fact, once 2011 comes to an end I will likely come within a couple hundred dollars of the top dollar amount I have ever spent on groceries (roughly $7,200 in 2003).

At the root of my increased spending is an ongoing rise in food commodity prices. At the core, when the cost of things like livestock and crops rise significantly (along with the price of fuel used to transport the stuff), the impact on the consumer can be eye opening. One can only hope that cost increases will moderate somewhat, but the fact that prices have climbed so much during an extended economic downturn (when one would think demand would be reduced) is a bit of a concern.

Along with increasing prices, I've also experienced an ongoing drought of sales, promotions, high value coupons, and rebates that in the past have allowed me to purchase many items for pennies (or for free!). For example, this time of the year had typically been a great time to stock up on free top of the line razors and blades from the likes of Gillette and Schick (like this). Sadly, with Christmas four days away, I have yet to see a single free razor deal so far this holiday season. Heck, even less generous (but still worthwhile) discounts like the 10% bonus for buying gift cards at Shaw's Supermarkets were no longer offered in 2011.

In summary, I have closely watched my grocery spending for several years now and see nothing to indicate that double digit percentage grocery price increases (much like similar health insurance premium increases) will not continue for the foreseeable future.


Tuesday, December 13, 2011

December 2011 Financial Asset Roundup

Here are my current financial assets as of the market close on December 12th, 2011:

Asset Nov 2011 Dec 2011 Change
Checking 2,391 728 -1,663
Money Market 38,419 40,865 2,446
Savings Bonds 52,318 52,421 103
Treasury Bills 0 0 0
CDs 87,914 88,269 355
Brokerage 101,778 101,106 -672
401k 93,479 92,431 -1,048
Roth IRA 47,921 47,447 -474
SEP IRA 265,455 264,299 -1,156
529 Savings 55,544 55,806 262
Total Assets $745,219 $743,372 -$1,847

The S&P 500 has declined a bit since the last update, dropping 2.17% during that time:

(chart courtesy of msn.com)

On the jobs front, the unemployment rate for November dropped to 8.6%, a significant decline from the 9% rate from October. Oil prices have remained flat at around $98 per barrel, while I've seen my gasoline purchases decrease by about 16ยข per gallon.

On the financial front, I am sadly less than a month away from the end of my 5 year Penfed CD @ 6.25% APY that I opened in January 2007. With such unappealing CD options currently available, I have decided on allocating that cash among a mix of I Bonds, Roth IRA, and 529 Plan contributions throughout 2012. I will also be selling my Procter & Gamble (PG) stock this month to take advantage of the 0% tax on dividends and capital gains, although I seem to be holding out for a Santa Claus Rally that probably won't be arriving this year.

I'm also planning on providing an annual grocery price inflation update this month as I wrap things up for the close of the 2011 business year for my S Corporation and get prepped for what I hope will be another wonderful Christmas holiday with my family.