With inflation, it's personal

Did you know your personal inflation may be higher than the national data?

National inflation and your personal inflation rate

If you thought George Orwell's iconic "All animals are equal, but some animals are more equal than others" quote sits right with the human race, think again. Inflation can claim to be its true representative. Because inflation impacts some of us more than others.

That's right, the headline inflation data you read in the media is just a nationwide average. Your personal inflation might be higher, or lower, than that. How so? Let's say you were in the mood to throw a tomatino party some months back when tomato prices brought a tear to many a household eyes, your personal inflation would have been most likely higher than the national average.

Inflation hits home

Now that we know that personal inflation is a byproduct of our lifestyle, we thought we'd present to you a table. Instead of dropping complex data and doing number gymnastics to ascertain your precise inflation, this table can give you a ballpark range.

The real price of your lifestyle choices

in %
Meat and fish 7.54
Spices 7.11
Vegetables 6.84
Pan, tobacco and intoxicants 6.57
Prepared meals, snacks, sweets 6.28
Egg 5.64
Personal care and effects 5.63
Fuel and light 5.6
Pulses and products 5.53
Health 5.51
Clothing 5.47
National inflation 5.36
Milk and products 5.35
Fruits 5.25
Education 5.21
Cereals and products 5.14
Housing 5.07
Household goods and services 4.85
Recreation and amusement 4.82
Footwear 4.75
Non-alcoholic beverages 4.65
Transport and communication 4.31
Oils and fats 4.25
Sugar and confectionary 2
Source: MoSPI

For more clarity, we identified some everyday middle-class households' essential and discretionary expenses. We mapped them over the last 11 years (from the baseline given by RBI in 2012) and rated them against the average inflation (of 5.37 per cent) over these 11 years.

Reading the table

The items that fall above the inflation line in the table are those whose prices have climbed faster than the national average. Conversely, those below the inflation line have seen their prices grow slower than the national average.

In other words, a tobacco-inhaling, fuel-guzzling meat-lover with a love for clothing will have a significantly higher personal inflation than the national average of 5.37 per cent. On the other hand, a fruit-loving, non-alcoholic beverage-sipping, sweet-toothed citizen will have a lower personal inflation. That said, if you have been footing healthcare bills, you may need more than fruit and sweet sustenance for your personal inflation to be below the national average.

Of course, this is just a quick - and a rather blunt - deduction of the table, but we hope you understand how this works. You only need to note if most of your expenses fall above or below the average inflation rate.

How to manage personal inflation

Investing is the only way your wealth can grow faster than inflation . Only then can you build wealth and be more equal than others in the long run.

Also read:
How inflation is stealing your wealth
Strange ideas about inflation

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