Glossary
Personal Inflation Glossary
Quick definitions for the personal inflation glossary so you know what every label means inside the basket calculator. Each term is short, practical, and links to deeper explainers when you want the full math. This is educational and calm, not advice.
Published: December 30, 2025 · Updated: December 30, 2025 · By FinToolSuite Editorial
Disclaimer
- Educational purposes only, not financial advice.
- Examples are illustrative and simplified.
- Results depend on your inputs and assumptions and are not guaranteed.
- This page explains terms, it does not predict inflation.
- See the Privacy Policy for handling details.
Open the personal inflation basket calculator
Use these terms while you build your basket, set assumptions, and compare scenarios.
Quick answers: personal inflation glossary
- A basket is your list of spending categories.
- Weights come from how much you spend in each category.
- Weighted average turns many category rates into one personal rate.
- Scenarios let you compare changes without guessing one perfect number.
Glossary terms
Basket
Your list of spending categories and monthly amounts. It is the foundation of the calculator.
Where you see it: the main table where you enter categories like housing and groceries.
Category
A single spending line such as rent, groceries, transport, or subscriptions.
Tip: keep names generic to protect privacy.
Monthly spend
The amount you pay each month for a category. If billed annually, divide by 12 first.
Example: $1,200 rent per month.
Category weight
The share of total spend for a category. Weight = category spend ÷ total basket spend.
Example: $1,200 rent out of $2,400 total spend = 50% weight.
Weighted average
The calculation that combines all category inflation rates using their weights. See the weighted average formula.
Contribution points
The portion each category adds to the total rate: weight × category inflation percent.
Example: 50% weight × 4% inflation = 2 contribution points.
Personal inflation rate
Your overall rate after combining all categories via the weighted average. It reflects your basket, not CPI.
Horizon
The number of years you project forward, such as 1, 5, 10, or 20 years.
Where you see it: projection settings in the calculator.
Projection
The year-by-year costs calculated from your basket, assumptions, and horizon. It is illustrative, not a forecast.
Scenario
A saved set of inputs so you can revisit and compare. Examples: Base, Rent up, Commute change.
Compare scenarios
Viewing two or more scenarios side by side to see differences in personal inflation rate and projected costs.
Nominal vs real
Nominal values are not adjusted for inflation. Real values reflect purchasing power after inflation. See nominal vs real returns.
Choose assumptions
Setting inflation percents for each category. Use a low, base, and high range if you are unsure. Guidance: choose assumptions.
Privacy reminder
Keep labels generic and avoid personal details. See the Privacy Policy.
Mini examples (illustrative)
Example 1: category weight
| Category | Monthly spend (illustrative) | Weight |
|---|---|---|
| Rent | $1,200 | 50% |
| Groceries | $1,200 | 50% |
Total spend $2,400. Each category weight is 50%.
Example 2: contribution points
| Category | Weight | Inflation percent | Contribution points |
|---|---|---|---|
| Rent | 50% | 4% | 2.0 |
| Groceries | 50% | 3% | 1.5 |
Personal inflation rate (illustrative) = 2.0 + 1.5 = 3.5%.
Related links
FAQ preview
What is a basket? Your list of categories and monthly amounts used to calculate personal inflation.
What is a category weight? The share of total spend for that category: spend divided by total spend.
What is weighted average inflation? The combined personal rate from summing weight × category inflation across all categories.
What are contribution points? The points each category adds to the total rate: weight × category inflation percent.
What does horizon mean? The number of years you project forward.
What is a scenario? A saved set of inputs you can compare to another scenario.
What is nominal vs real? Nominal is not adjusted for inflation; real reflects purchasing power.
Is this financial advice? No. It is educational and depends on your inputs.
Try the personal inflation basket calculator
Enter your basket, set assumptions, and compare scenarios using the terms above.