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Home>Daily Capital>Personal Finance>This Spending Category Is Up 39% Since January 2020

This Spending Category Is Up 39% Since January 2020

Americans of all income levels are feeling the pinch of inflation.

To some, that pinch represents a larger portion of their overall household spending.

Personal Capital data reveals that average monthly grocery spending across users of all net worths and salaries rose from $437 in January 2020 to $607 in January 2022. The leap represents a nearly 39% increase in grocery spending across the board.

And this isn’t for lack of eating out.

In addition, restaurant spending is up. January 2020 data shows a $610 average monthly spend at restaurants (including takeout) per Personal Capital user, compared to $660 in January 2022.

Less than $1M net worth $1-5M net worth $5-30M net worth Greater than $30M net worth
Jan 2020 Jan 2022 Jan 2020 Jan 2022 Jan 2020 Jan 2022 Jan 2020 Jan 2022
Groceries $346.00 $491.00 $532.00 $723.00 $700.00 $995.00 $1,173.00 $1,669.00
Restaurants $489.00 $548.00 $709.00 $736.00 $1,159.00 $1,252.00 $2,534.00 $3,052.00
Total Spent on Food $835.00 $1,039.00 $1,241.00 $1,459.00 $1,859.00 $2,247.00 $3,707.00 $4,721.00
Total Monthly Spend $2,434.00 $2,996.00 $4,295.00 $4,901.00 $7,502.00 $8,571.00 $21,321.00 $27,726.00
Percent of Overall Budget Spent on Food 34.31% 34.68% 28.89% 29.77% 24.78% 26.22% 17.39% 17.03%

Rising Costs of Staple Food Items

Rising food spending among Personal Capital users correlates to rising food prices on a national level. According to the Bureau of Labor Statistics (BLS), prices of common food staples have risen over the past two years.

Here’s a look at the average price per gallon of milk:

  • $3.25 in January 2020
  • $3.79 in January 2022

Source: Bureau of Labor Statistics

And bread prices:

  • $1.35 in January 2020
  • $1.56 in January 2022

Source: Bureau of Labor Statistics

Meanwhile, BLS reports these additional price increases for common household food products from Sept. 2020 to Sept. 2021:

  • Cereals and bakery products: up 2.7%
  • Fruits and vegetables: up 3%
  • Nonalcoholic beverages: up 3.7%

How to ‘inflation-proof’ your household

Just as you consider how to adjust your portfolio to achieve your retirement goals, also keep in mind how much cash you keep in your portfolio. Personal Capital user data shows that most households with net worths between $1 million and $30 million keep under 20% of their overall portfolio in cash.

According to Michelle Brownstein, senior vice president of Personal Capital Private Client Group, this practice helps guard your money from rising prices by hopefully earning a return greater than inflation on whatever portion you don’t need in the immediate future.

“Cash relative to inflation is a guaranteed loss,” Brownstein says. “If I have cash, it’s the same dollar amount today as it was a year ago. And inflation is more than 7%.”

One exception is low inflationary environments, however: “In the last decade inflation has run close to 2%,” says Brownstein. When the economy is running at a 2% inflation rate, keeping cash in a high-yield savings account that earns 1% a year may be fine; you’re only losing 1% per year.

“But if you’re getting 1% on a savings account, and inflation 7%, you are losing 6% a year,” says Brownstein. “That is a big loss.”

Inflation is therefore one of the biggest risks to retirement spending, according to Brownstein. Retirement savers shouldn’t get too conservative too early on and aim to have a well-rounded strategy that includes small percentages of alternative investments as inflation hedges. That includes investments like gold, real estate, and commodities.

Want a better way to manage your investments? Millions of people use Personal Capital’s free and secure online financial tools to see all of their accounts in one place, analyze their investments, and plan for long-term goals, like buying a house or saving for retirement.

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Author is not a client of Personal Capital Advisors Corporation and is compensated as a freelance writer.

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. Compensation not to exceed $500. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money. Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

Third party data is obtained from sources believed to be reliable; however, Personal Capital cannot guarantee the accuracy, timeliness, completeness or fitness of this data for any particular purpose. Third party links are provided solely as a convenience and do not imply an affiliation, endorsement or approval by Personal Capital of the contents on such third party websites.

Megan DeMatteo is a former CNBC money reporter and Pushcart-nominated poet. She now contributes to various publications with a specialization in personal finance.
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