Why should we annually adjust our monthly dues?
Inflation! Inflation is defined as a sustained increase in the general level of prices for goods and services. It is measured as an annual percentage increase. As inflation rises, every dollar you own buys a smaller percentage of a good or service (Sited). In 1998, you budged $100 dollars a month for gasoline. In 1998, we paid on average a $1.25 for a gallon of gasoline. It’s now 2015 and the average cost for a gallon of gas has increased to $2.80. As you can see, our monthly budget of $100 dollars no longer enough.
When it comes to monthly dues, let’s say we were paying $110 dollars a month in 1998. It is now 2015, and that $110 dollars does not have the same buying power. It is no longer enough. So what amount would we need in 2015 to equal the buying power of the $110 dollars we had in 1998? The answer, 160.58!
Based on the U.S. Bureau of Labor Statistics, we would need $160.58 dollars to match the buying power of $110 dollars in 1998. The CPI inflation calculator uses the average Consumer Price Index. This data represents changes in prices of all goods and services purchased for consumption by urban households. This index value has been calculated every year since 1913. For the current year, the latest monthly index value is used. It’s fun. Here is an idea, type in your annual salary of a historical year and see if it has inflated or deflated based on the CPI. Check out the tool by clicking here.
People like to complain about prices going up, but they often ignore the fact that wages should be rising as well. The question shouldn’t be whether inflation is rising, but whether it’s rising at a quicker pace than your wages. Finally, inflation is a sign that an economy is growing. In some situations, little inflation (or even deflation) can be just as bad as high inflation. The lack of inflation may be an indication that the economy is weakening. As you can see, it’s not so easy to label inflation as either good or bad – it depends on the overall economy as well as your personal situation. (Sited)