Cost of living: Plan financial future with long-term inflation in mind

November 1, 2009
William J. Lynott

Political considerations aside, President Obama's fiscal policies are likely to serve eventually as a stimulant to growth in our economy. That's why I believe that it's time to take the likelihood of long-term inflation into account as you plan your financial future.

Key Points

The economic meltdown of the past year or so gave rise to such gloominess that some forecasters were hinting around about the possibility of deflation. Not anymore.

Inflation and your future

Here's an example of how inflation affects your life right now: If you paid $60 for a week's worth of groceries in 1988, you're paying about $111.62 for those same items today.

Calculating inflation's effects over a period of two or more years can be dauntingly complex. That's why it's difficult to make simple dollar-to-dollar comparisons from one year to another. If you'd like an easy way to gauge inflation's effects on some of your personal or business expenses, log on to http://www.westegg.com/inflation/. This easy-to-use inflation calculator adjusts any given amount of money for inflation, according to the Consumer Price Index, from 1800 to 2008.

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