Personal Inflation rate

Jami74

RG2015 said: Well, I have calculated my inflation  I also calculated mine for interest. I really thought mine hadn't changed much so am quite surprised to see a 12% change. Mobile costs increasing by 20% looks like a massive jump, but I am still only paying £25 for 4 SIM only contracts. Maybe it is time to switch to a cheaper provider. And paying an extra £5 a month on water looks like a big increase. Travel costs are hard to measure because my commute is very different this year compared to last. Electric reflects my direct debit, I am currently in credit and am hoping with that and the energy grant and a bit of shivering it will not need to go up too much more before the Spring. I could shave a bit of the grocery shopping too with a bit more planning and a bit less eating. Rent 9% Council tax 3% Water 15% Electric 46% Broadband 8% Food 6% Travel 18% Mobile 20%

RG2015

binao said:

I also, am  intrigued by your need for a PIC 

I found this from The Times during my research. I did not find their recommended calculator very helpful but their reasons for calculating PIC resonate with me.

What should I do with the results?

You should now have a good sense of how your personal inflation stacks up against the headline figures. So what should you do with the data?

Knowing your own inflation rate isn’t just a matter of idle curiosity. The result can be sobering but it can also be the eye-opener you need.

Seeing where your budget is being hit the hardest can help you assess where to cut back.

For example, finding out your grocery bill has gone up by a certain amount a year could be the trigger you need to start shopping at different supermarkets.

https://www.thetimes.co.uk/money-mentor/answer/how-to-calculate-your-own-personal-inflation-rate/

eskbanker

RG2015 said:

Seeing where your budget is being hit the hardest can help you assess where to cut back.

For example, finding out your grocery bill has gone up by a certain amount a year could be the trigger you need to start shopping at different supermarkets.

But, to play devil's advocate, your detailed analysis homes in on three categories where the inflation rate is 9.9% or more, so yes, those would look like some areas worth focusing on, but the incremental value of coalescing everything together into a weighted average of 4.9% seems less useful (to me!)

RG2015

eskbanker said:

RG2015 said:

Seeing where your budget is being hit the hardest can help you assess where to cut back.

For example, finding out your grocery bill has gone up by a certain amount a year could be the trigger you need to start shopping at different supermarkets.

But, to play devil's advocate, your detailed analysis homes in on three categories where the inflation rate is 9.9% or more, so yes, those would look like some areas worth focusing on, but the incremental value of coalescing everything together into a weighted average of 4.9% seems less useful (to me!)

Precisely. The devil is in the detail.

I often find the real benefit of research and analysis is in the process, not the results.

As in life, it’s about the journey, not the destination.

Marchitiello

If you change spending habit on basic food you are not calculating inflation at all but your response to it (you mentioned freeze and planning your meals better).

my supermarket spend (family with a teenager and two primary school children) has increased considerably and to ascertain this you need to compare your normal basket, even if only considering the main 10 items (for instance bread, milk, eggs, bananas, 1kg of fruit, 1kg Of vegetable (my selection here tend to be seasonal), pasta, etc).. price of milk and dairy product have seen probably the sharpest increase.

jimjames

RG2015 said:

Can anyone see any flaws in my method?

It's a very good point made above that the last 2 years have been exceptional so aren't really very good for comparison of spending. We've not been able to travel or do many things that would normally have happened so spending would have been quite skewed if you're trying to get a like for like

RG2015

Marchitiello said:

If you change spending habit on basic food you are not calculating inflation at all but your response to it (you mentioned freeze and planning your meals better).

my supermarket spend (family with a teenager and two primary school children) has increased considerably and to ascertain this you need to compare your normal basket, even if only considering the main 10 items (for instance bread, milk, eggs, bananas, 1kg of fruit, 1kg Of vegetable (my selection here tend to be seasonal), pasta, etc).. price of milk and dairy product have seen probably the sharpest increase.

You are correct. I am not calculating inflation at all. I will leave that to the ONS.

I am saying that rather than blindly accepting the statistics, I am analysing my personal data and using this to plan my finances.

It is probably impossible to compare like with like, but I am using my data which is based on fact.

RG2015

jimjames said:

RG2015 said:

Can anyone see any flaws in my method?

It's a very good point made above that the last 2 years have been exceptional so aren't really very good for comparison of spending. We've not been able to travel or do many things that would normally have happened so spending would have been quite skewed if you're trying to get a like for like

I am treating travel and leisure as discretionary expenditure. What is left is normal expenditure, hence very much like for like.

callum9999

RG2015 said:

Marchitiello said:

If you change spending habit on basic food you are not calculating inflation at all but your response to it (you mentioned freeze and planning your meals better).

my supermarket spend (family with a teenager and two primary school children) has increased considerably and to ascertain this you need to compare your normal basket, even if only considering the main 10 items (for instance bread, milk, eggs, bananas, 1kg of fruit, 1kg Of vegetable (my selection here tend to be seasonal), pasta, etc).. price of milk and dairy product have seen probably the sharpest increase.

You are correct. I am not calculating inflation at all. I will leave that to the ONS.

I am saying that rather than blindly accepting the statistics, I am analysing my personal data and using this to plan my finances.

It is probably impossible to compare like with like, but I am using my data which is based on fact.

It's not impossible to compare like with like, that's exactly what the ONS does...

I'm in full agreement that you should be using your personal budget to assess your finances, but given the ONS (or anyone of note I've seen?) has never said you should be using their inflation figures to do this, I don't see where the hostility comes from? Their data is also "based on fact".

You might as well be complaining that the Bank of Ghana's interest rate isn't representative of your personal budget. Of course it's not, it's not meant to be!

RG2015

callum9999 said:

RG2015 said:

Marchitiello said:

If you change spending habit on basic food you are not calculating inflation at all but your response to it (you mentioned freeze and planning your meals better).

my supermarket spend (family with a teenager and two primary school children) has increased considerably and to ascertain this you need to compare your normal basket, even if only considering the main 10 items (for instance bread, milk, eggs, bananas, 1kg of fruit, 1kg Of vegetable (my selection here tend to be seasonal), pasta, etc).. price of milk and dairy product have seen probably the sharpest increase.

You are correct. I am not calculating inflation at all. I will leave that to the ONS.

I am saying that rather than blindly accepting the statistics, I am analysing my personal data and using this to plan my finances.

It is probably impossible to compare like with like, but I am using my data which is based on fact.

It's not impossible to compare like with like, that's exactly what the ONS does...

I'm in full agreement that you should be using your personal budget to assess your finances, but given the ONS (or anyone of note I've seen?) has never said you should be using their inflation figures to do this, I don't see where the hostility comes from? Their data is also "based on fact".

You might as well be complaining that the Bank of Ghana's interest rate isn't representative of your personal budget. Of course it's not, it's not meant to be!

I would say scepticism rather than hostility, but this is based upon the ONS personal inflation calculator not their official figures.

Any disparaging comments on the official inflation figures are more down to the way people appear to believe that everyone is affected in the same way.