Since last summer, US gas prices have gone up by something like 50%. For those in Maryland, so did our power utility costs. No matter where you are you’ve likely felt/seen that groceries cost a bit more than they did 6 months ago.
I feel sure that 99.99% of us are affected by these increases, and there’s no doubt some of us are more critically affected than others. I’ve been more and more troubled about this since yesterday afternoon. Here’s what happened—
I met a friend for our monthly lunch. Halfway through her salad she said, “Girllll, I’m starting to feel the money squeeze. My car’s paid off and my mortgage is manageable, it’s the rest of it!”—
- The grocery trip that used to cost $65 now costs $75.
- Her electric bill (for lights, central air, and stovetop) was $150, now it’s $210.
- The estimate-based propane bill (for central heat, water heater, ovens) has been $220 monthly, but it’s time to settle up based on actual usage and they’ve billed her an additional $1400. Due, like, now.
- And since the propane bill’s estimate is based on the previous 12 months use…starting next month her monthly bill will be $330.
- In addition, the cost of propane is going up something like 15¢ a gallon, so she anticipates owing them another huge chunk this time next year.
She went on to say that because of these there’s no wiggle room in her budget for extra saving. Along with regular additions to her 401K, she’s saved a year’s salary so far. However, unless she changes jobs, gets a raise, or prices go down, there won’t be any more cash socked away in CDs and her IRA.
The thing is, she’s a well-educated person in a management position with a solid company. She has always handled her money well, with a solid savings, an affordable fixed-rate mortgage, and no other debt.
Barring a layoff, she’s pretty much immune to minor shifts in the economy—but she’s feeling it now.
This is what’s troubling me.
That and lunch was expensive. Not the food…the 60 minute round trip drive. Driving to and from lunch cost more than the lunch itself. My other monthly lunch date, Chris, has established a “You Drive, I’ll Buy” lunch policy to defray my meeting up expenses.
Admittedly, these are relatively luxurious frets of lower-middle to middle-middle class Americans: not saving enough, spending too much on gas, and who’s buying lunch.
What’s been troubling me is if we’re fretting, what’s everyone else doing?
What Everyone Else Is Doing
If I’m worried about affording gas for lunch dates twice a month, someone else out there is worried about affording gas to get to work every day.
If my girlfriend can’t save extra, then someone else out there can’t save at all.
Which means that someone who was just barely covering their credit card or student loan debt, now can’t afford to pay it.
Which means that someone who wasn’t covering their debt, now also isn’t covering their utilities.
Which means that someone who wasn’t covering debt or utilities now can’t afford their medical bills.
Someone else can’t afford their mortgage
Someone else is behind on their rent.
Which means someone else isn’t eating as well.
Which means someone else isn’t eating as much.
Which means someone else isn’t eating at all.
The Big Diff
It doesn’t take alotta money to make alotta difference. An additional $400 each month is a big help regardless of where you are socio-economically.
Think about it: The difference between saving and not saving, eating and not eating—or something in between—can be a $47 ebook that sells 2 or 3 copies each week.
But Why Passive Income?
If we earn our living as an hourly or salaried employee, or bill by the hour, we weren’t gifted with more time to cover these increased expenses. The days didn’t increase proportionally…they’re still only 24 hours long.
We can’t make time to earn more, we can only take time away from something else, so unless we got a comparable cost-of-living increase or successfully raise our rates, we’re going to continue coming up short.
At least, that’s true for those of us that don’t have something running in the background: A published book with a royalty payout. A useful and affordable ebook. A membership site. A directory site. A niche content site with some ad revenue.
For God’s sake, not a blog…too much hands-on time required.
We just need to create a little sumpin that will pay us back for a year or two…or twenty. Something that doesn’t need our hand in to continue making a buck or two…or four hundred.
That’s all I’m sayin’.
