Thursday, December 29, 2016

Budget Items

I know that the Canadian government is saying that inflation is low, however I do wonder about this. For some items it is not true. What the Bank of Canada says for inflation per year is as show in the table below.

Years Total Inflation Core Inflation
3 1.71% 2.18%
5 1.44% 1.78%
10 1.67% 1.76%

I live in Ontario where the cost of Electricity has been a problem of awful government policies for years. My Electricity has gone up for me by 22.2% between 2015 and 2016. My increases over the past 3, 5 and 10 years are at 6.23% per year, at 3.60% per year and 4.77% per year.

I find that food is also raising much higher than what is said to be the inflation rate. In 2016 I spent 17.5% more on food than in 2015. My increases over the past 3, 5 and 10 years are at 11.7% per year, at 7.1% per year and 4.7% per year. Since I generally buy fresh rather than pre-packaged food, the changing CDN$ to US$ could be a big factor. Our dollar is declining against the US$ and we do get fresh food in non-summer months from the US.

Cable, Internet and Phone also seem to be an area where prices are rising quickly. These bills were up by 9.4% in 2016 compared to 2015. My increases over the past 3, 5 and 10 years are at 9.2% per year, at 2.2% per year and 5.7% per year.

I would think that these items would be core items in anyone's budget. The food inflation will affect my budget much more than the other items. I spend just over 10% of my budget on food, just over 1% of my budget on electricity and for the Cable, Internet and Phone combo I spend just under 3% of my budget.

On my other blog I wrote yesterday about Methanex Corp. (TSX-MX, NASDAQ-MEOH)... learn more. Tomorrow, I will write about Magna International Inc. (TSX-MG, NYSE-MGA)... learn more on Friday, December 30, 2016 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

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