This is how you calculate your own personal inflation rate when prices are rising

Inflation eased slightly in April but is still close to a 40-year high, with consumer prices rising at an 8.3% annual rate. Rising costs for housing, groceries, airfare and new cars were the biggest contributors to this key indicator of inflation.

According to Mark Zandi, chief economist at Moody’s Analytics, the typical American family spends about $450 more a month on goods and services than it did a year ago. However, you may not be “typical”. We don’t all spend the same amount on the same things.

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Figuring out how much inflation is actually affecting your wallet depends on how much you spend and where you spend it. You need to calculate your personal inflation rate. That’s how it’s done:

  1. Look at what you spent on food, housing, gas, entertainment, clothing, education and other things. (To find out exactly what to include, go here for the U.S. Bureau of Labor Statistics’ list of expenses that make up the Consumer Price Index.)
  2. Gather your credit card bills and bank statements to find the exact amounts you’ve spent in each category.
  3. Add up your monthly expenses for the last month and a year ago.
  4. Then subtract your total spend for April 2021 from April 2022.
  5. Divide this difference by your monthly expenses for April 2021.
  6. The result of this equation is your personal inflation rate.

Depending on your income, the impact of your personal inflation rate on your wallet can feel better – or worse – than the latest CPI number.

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https://www.cnbc.com/2022/05/13/how-to-calculate-your-own-personal-inflation-rate-amid-rising-prices.html This is how you calculate your own personal inflation rate when prices are rising

Gary B. Graves

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