Girl Scout Cookies and Inflation

17 February 2014
Comments 0
17 February 2014, Comments 0

Having lived in a town that makes Girl Scout Cookies and one where the Girl Scouts were founded, I thought it appropriate while in this six-week selling frenzy, to use those delicious cookies to explain inflation. Those marvelous cookies got a hefty price hike this year. In 2009, the last cookie price hike went from $3.50 to $4.00 a box. This year, the boxes went from $4.00 to $5.00 – the single largest % price increase in their cookie selling history. With 25% inflation in 5 years, that breaks down to a 5% inflation rate per year. As published by the US Government on January 16, 2014, the current US inflation rate is 1.5%. The highest rate since 2009 has been 3.0%. Why did the Girl Scouts go to $5 a box? Is it because they didn’t want the girls to have to make change? If I retired today, and live for another 20 years, given a 5% inflation rate, how much will my Girl Scout Cookies cost then? Over $13 a box! What if the inflationary rate was only 1.5%? $6.75 a box! I can buy two times as many from my great-granddaughter if the inflationary rate stays low. The key point here is to not count inflation out! You must be aggressive with your retirement plan in a couple of areas: food, medical and healthcare costs, and educational planning (for that beautiful grandchild). Be sure and enjoy your Girl Scout Cookies this year, and save some money today – so you can afford to buy some in retirement!

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