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.

More from Invest in You:
Expert says Great Resignation changed the workplace forever
Do you want a four day week job? Here’s how to land one
Employers Increase Mental Wellness Perks Amid Great Resignation

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.

SIGN UP: Money 101 is an eight-week financial freedom learning course delivered to your inbox weekly. For the Spanish version of Dinero 101 click here.
CASH REGISTER: Meet a 26-year-old who makes $30,000 a month in “mostly passive” income and has built a net worth of $1.3 million with Acorns+CNBC

Disclosure: NBCUniversal and Comcast Ventures are investors acorns. This is how you calculate your own personal inflation rate when prices are rising

Gary B. Graves

World Time Todays is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – The content will be deleted within 24 hours.

Related Articles

Back to top button