Definition
What Is Personal Inflation
Personal inflation is about your own basket, not a national average. It looks at your spending mix and how those categories change so you can see a personal inflation rate that fits your day to day life.
Published: December 30, 2025 · Updated: December 30, 2025 · By FinToolSuite Editorial
Try the personal inflation basket calculator
Add your categories to see your personal inflation rate and a simple projection.
Disclaimer
- Educational purposes only, not financial advice.
- Examples are illustrative and simplified.
- Results depend on your inputs and assumptions and are not guaranteed.
- This tool does not fetch official CPI and does not predict the future.
- See the Privacy Policy for data handling details.
Quick answer
- Personal inflation is the weighted average of price changes in your own spending categories.
- Your weights can be very different from CPI.
- A big category like rent can dominate your result.
Simple definition
Personal inflation is a weighted average inflation rate based on your own basket. Each category has a weight (its share of your spending) and an inflation percent (how you expect that category to change). The weighted average inflation rate combines those to show how your costs could move.
It stays focused on your mix, so two people in the same city can have different personal inflation rates if their rent, transport, and grocery choices differ.
Why it can differ from CPI
- Your category mix is different: your weights may not match the national basket.
- Your timing is different: leases, renewals, and price changes hit you on your own schedule.
- Local prices vary: cities and regions move at different speeds.
- Substitutions and habits differ: you may switch brands or transit modes while the index assumes something else.
See more in personal inflation vs CPI.
Two quick examples
Illustrative only. Round numbers to show how weights change the personal inflation rate.
| Household | Main categories | Monthly spend | Category inflation | Personal inflation result |
|---|---|---|---|---|
| Example A: rent heavy basket | Rent $1,500; groceries $400; transport $200 | $2,100 | Rent 4%; groceries 3%; transport 2% | ~3.6% weighted average inflation |
| Example B: transport heavy basket | Transport $700; groceries $500; rent $700 | $1,900 | Transport 5%; groceries 3%; rent 2% | ~3.6% weighted average inflation |
Both land near a 3.6% personal inflation rate, but for different reasons. One is driven by rent weight, the other by higher transport inflation. Change any weight and the weighted average inflation shifts.
Try it in the tool
Add 3 to 6 categories, enter monthly spend, and choose low, base, and high assumptions to see your personal inflation rate and projection.
Open the calculatorRelated concept: nominal vs real
Nominal numbers rise in pounds or dollars without adjusting for purchasing power. Real numbers account for inflation to show what money can buy. Read more in nominal vs real returns.
FAQ preview
What does personal inflation mean?
It is your weighted average inflation rate based on your own spending mix.
Is this the same as CPI?
No. CPI is a national average; personal inflation uses your categories and weights.
Why might mine be higher than CPI?
If a big category like rent rises faster than the national mix, your rate can be higher.
What categories matter most?
The biggest categories by spend usually move the weighted average inflation the most.
What inflation percent should I use?
Use low, base, and high scenarios to see a range; avoid treating any as a forecast.
Can I save scenarios?
Run multiple scenarios and keep exports labeled so you know which inputs you used.
Can I export results?
Yes. Download PDF and CSV projections and store them securely.
Is this financial advice?
No. It is educational and depends on your inputs; outcomes are not guaranteed.