How to Calculate Your Personal Inflation Rate

See how rising costs impact you and your family.
See how rising costs impact you and your family.
(Lori Hays)

See how rising costs impact you and your family

Yes, inflation is at a 40-year high, but you might not be feeling its sharp bite. It all depends on where you spend your money. 

The Consumer Price Index is a basket of thousands of goods and services. In March, it marked a nearly 8.5% jump from a year ago. Categories such as gasoline, food and housing are the biggest contributors to the increase. 

To analyze inflation’s threat to your farm and family, calculate your personal inflation rate.

  1. Determine your monthly expenses for the following categories: food and beverages, housing, clothing, transportation, medical care, recreation, education, communication and other goods and services. Include big-ticket items you pay once or twice a year, such as home insurance.
  2. Subtract your monthly spending a year ago from your current monthly spending. 
  3. Divide that sum by your monthly spending from a year ago.

For instance, if your spending last month was $4,500, and a year ago it was $4,250, the difference is $250. Divide $250 by $4,250 and you land at a personal inflation rate of 5.9%. 

MINIMIZE INFLATION IMPACTS

Inflation is a growing risk for your farm and family. “It is also largely out of your control,” says Brent Gloy, economist at Agriculture Economic Insights. “What you can do is recognize prices are heading up and plan for it.”

This inflation calculation can be an eye opener about your family living expenses. If tracking your expenses is intimidating, start small, encourages Alex White, farm and financial management instructor at Virginia Tech University. For one month, track all personal expenses on paper or with an electronic tool.

Once you have current data, he says, you can see if you need to reduce expenses or set some financial goals. 

You Are What You Spend

Some products and services have seen dramatic jumps in price. Luckily, a 13% jump in cracker prices isn’t felt as sharply as the nearly 40% increase in gas prices. Here are inflation levels for a few categories. 

Inflation Rates by Catetory

Read More

How to Anchor Your Farm's Profits From Inflation’s Pull

John Phipps: The Inflation We Expect

3 Economic Forces to Watch that Will Impact Agriculture

Adios to the Ag Dollar: A Farmer’s Story on Inflation and Inputs

Is the Fed Behind the Curve in Battling Inflation?

 

Latest News

APHIS Now Thinks Wild Birds Are to Blame for Highly Pathogenic Avian Influenza's Arrival on Four U.S. Dairies
APHIS Now Thinks Wild Birds Are to Blame for Highly Pathogenic Avian Influenza's Arrival on Four U.S. Dairies

The livestock industry continues to grapple with the first confirmed cases of HPAI in cattle, while federal and state agencies continue to assure consumers there's no concern about the safety of the U.S. milk supply.

AABP Creates 'Using Credentialed Veterinary Technicians  in Bovine Practice' Guidelines
AABP Creates 'Using Credentialed Veterinary Technicians in Bovine Practice' Guidelines

Utilizing credentialed veterinary technicians (CVTs) in bovine practice can assist veterinarians in providing additional and efficient services to their large animal clients.

Get the Facts Straight on Highly Pathogenic Avian Influenza
Get the Facts Straight on Highly Pathogenic Avian Influenza

Now that the mystery illness impacting some dairy herds has been revealed as the same strain of Highly Pathogenic Avian Influenza that has been impacting the U.S. poultry flock, pork producers are asking questions.

New Guide Helps Producers Maximize Values of Cull Cows
New Guide Helps Producers Maximize Values of Cull Cows

A new resource developed by the National Cattlemen’s Beef Association and CattleFax helps cattle producers maximize profitability from their culling decisions.

"Boring" Technology Will Reshape Dairy Over the Next 10 Years
"Boring" Technology Will Reshape Dairy Over the Next 10 Years

Once a technology becomes a boring experience it means it has become proven, well-adopted, and easy to utilize. There are three "boring" technologies silently shaping the industry.

Meat Institute: Properly Prepared Beef is Safe to Eat; HPAI is not a Food Safety Threat
Meat Institute: Properly Prepared Beef is Safe to Eat; HPAI is not a Food Safety Threat

According to the Centers for Disease Control and Prevention (CDC) and USDA food safety experts, properly prepared beef is safe to eat and is not a food safety risk to humans.