Liz Weston wrote a great article on “Personal Recession“. Many points were brought up in the article to help someone determine if they were in a personal recession.

Are you making more than you were before? On the surface that seems like an easy question to answer. Yes, I got a 3% raise. But Ms. Weston raises the point that many things have increased in price over this past year which could cut into the supposed raise.

First is health insurance premiums. More companies are going to a High Deductible, Health Plan where the employee covers every year up to $5k of medical costs before the insurance kicks in.  Also these plans do have limits and often times they are less comprehensive than tradtional plans.  Personally our insurance was raised by about 25% from last year.  Our monthly premiums while not outrageous, $100/month for medical, vision, and dental for the two of us, well it’s going up FAST!
Second energy prices are soaring.  Absolutely.  In March 2007 we recieved a letter in the mail from our utilities providers.  The natural gas prices were increasing by 30% this coming year.  And our electric bills by 10%.  That’s way above the 3% raise we personally saw.  I’m sure we’re not alone in this either.

Third, rising cost of groceries.  I’ve been saying it for a year now.  The prices of groceries has gone up a lot.  In January I mentioned a letter from the Food Bank we donate to.  The cost of groceries in our area has gone up in 1 year an average of 7.8%.  Of course dairy and eggs have nearly doubled in the same year.  Maybe it’s not so drastic in lower cost of living areas but I’m sure they too are feeling the pressure.

Fourth, gas prices for transportation. Now the cost is at least $3/gallon, in 2005 it was probably closer to $2/gallon.  This is a 50% increase in 3 years.  And maybe it’s only a few hundred extra every month.  But added onto all other costs which are rising it makes a huge difference.  It feels like everything is snowballing.

Also DH’s tuition since 2006 has increased about 20%/credit.  The university says it’s due to rising costs.  How can I argue?  If we are undergoing rising prices businesses are as well. And they are passing the cost on to us the consumer.

So are you in a personal recession?  I feel like we are.  I feel that we are being hounded on every side.  That we are fighting a battle against the economy.  That our paycheck which was lower 2 years ago definitely felt A LOT more luxurious.  And honestly looking at my budgets it was.  We paid less utilites, less health insurance, less groceries, and gas.  There was more “fat” in the budget to trim.

But now is the time to get serious.  Serious about paying off debt.  Serious about examining your career.  Serious about being mindful of your spending.  Even if you don’t have debt, it’s time to be worried that one life changing event could change that. 

But as always there is tomorrow to look forward too.