Personal Inflation rate

RG2015

There are personal inflation calculators online, but I am sceptical of their accuracy. Then I had a thought. What if I compared my actual regular expenditure for the 12 months to 31/7/22 with the same for y/e 3/7/21? I can then see how this compares with cpi.

I know I may not be fully comparing like with like, but it is what applies to me.

The main reason is that I cannot see my regular expenditure increasing as fast as the official figures, or as much as everyone else says.

Can anyone see any flaws in my method?

eskbanker

I haven't researched personal inflation calculators but would expect them to do exactly what you describe, i.e. compare equivalent expenditure over comparable time periods, so am puzzled by your concern about their accuracy and how your plan differs?

In terms of the reason, what do you see as the benefit of being able to work out a figure for this (over and above normal monitoring of actual versus 'budget' spend)?

binao

I also, am  intrigued by your need for a PIC 

Nebulous2

Go for it.

While I expend a bit of energy in screwing down outgoings, I've never been particularly good at budgeting. Collecting the data I need might be challenging. 

I also have variable, expenditure,which makes year-on-year difficult. A one-off bike for instance. 

RetSol

My month-on-month expenditure since April 2021 is up by c. 30%.

The reason is, largely, that since Spring 2022 I have started to have a life again.

I took my pension in May 2020 and, since then, have been saving a good deal from my pension income but.. no more.

That's fine. Not a problem. 

My point is that everyone is different and that the pandemic skewed my spending downwards considerably 

binao

RetSol said:

My month-on-month expenditure since April 2021 is up by c. 30%.

The reason is, largely, that since Spring 2022 I have started to have a life again.

I took my pension in May 2020 and, since then, have been saving a good deal from my pension income but.. no more.

That's fine. Not a problem. 

My point is that everyone is different and that the pandemic skewed my spending downwards considerably 

Great on the "no more". You can't take it with you.

 I squandered my pandemic savings on a Mercedes.

RG2015

I am a curious soul. Although on a more serious note, I am concerned at how the cost of living crisis will affect me and how best to plan for it.

CPI to July 22 is 10.1% and will remain in double digits for at least six months. Is this applicable to me?

Well, I have calculated my inflation for y/e July 22 and it has come out at 3.3%.

There is massive variation in different categories but I guess this is not surprising. I have tried to compare regular expenditure and excluded one-off items. The full results are as follows.

Heating oil fell dramatically after lockdown with the surplus oil stocks but soared after Russia's invasion of Ukraine. This, along with electricity is my biggest concern going forward.

Note: Table amended for earlier error.

Supermarket	-6.6%  -3.1%
Council Tax	3.1%
Electricity	6.8%
Water	4.1%
Heating Oil	47.4%
Petrol (adjusted for mileage variation)	18.0%
House insurance	5.0%
Car insurance	9.9%
Mobile	-1.1%
Broadband	2.7%
Total on spend of approx £10k	3.3% 4.9%

binao

@RG2015

Supermarket   -6.6% "Minus"

Maybe Morrisons?

My nearest Morrisons, 20 miles. 

RG2015

binao said:

@RG2015

Supermarket   -6.6% "Minus"

Maybe Morrisons?.

My nearest Morrisons, 20 miles. 

Tesco

I am sure though that this will include changes in our shopping patterns, such as more use of freezer and less wastage. We are also planning meals in advance.

However I have just found an error and the -6.6% supermarket should be -3.1% making the total 4.9%

I will amend my post.

RG2015

Nebulous2 said:

Go for it.

While I expend a bit of energy in screwing down outgoings, I've never been particularly good at budgeting. Collecting the data I need might be challenging. 

I also have variable, expenditure,which makes year-on-year difficult. A one-off bike for instance. 

I have excluded one-off expenditure as this is more discretionary.

Is the bike for leisure or transport? If transport, you should save on other transport costs.

One thing I have done is to use a dedicated credit card for supermarket shopping making it easier to monitor. 

RG2015

eskbanker said:

I haven't researched personal inflation calculators but would expect them to do exactly what you describe, i.e. compare equivalent expenditure over comparable time periods, so am puzzled by your concern about their accuracy and how your plan differs?

In terms of the reason, what do you see as the benefit of being able to work out a figure for this (over and above normal monitoring of actual versus 'budget' spend)?

My method uses actual figures for both this year and last year. The calculators I have seen just ask you to put in how much you spend each month. They then apply their observed average inflation for these costs.

In effect they just weight my actual current spend based on the distribution between their categories.

As regards the benefit to me, it just reinforces my belief that inflation conforms to the old adage of lies, damn lies and statistics.

If my figure does move significantly than I will act accordingly rather than panic with the rest of the country when the latest inflation figures are published