Personal inflation
What Is Personal Inflation Index Explained Simple Guide
This what is personal inflation index explainer shows how your own basket can differ from CPI, why weights matter, and how to read the number safely with two quick examples. It keeps the language simple and points you to the calculator.
Published: January 7, 2026 · Updated: January 7, 2026 · By FinToolSuite Editorial
Calculate your personal inflation index
Enter your categories, see weights, and compare to your income change.
Disclaimer
- Educational only. Personal inflation is an estimate based on your inputs. No guarantees.
- Keep examples illustrative, not precise forecasts.
- Use the Privacy Policy to understand handling.
What is a personal inflation index?
A personal inflation index is your weighted average inflation rate built from the categories you actually spend on. Each category carries a weight based on how much of your budget it takes. Your number can be higher or lower than CPI because your basket is different from a population basket.
Use it to understand purchasing power alongside the Why Am I Getting Poorer guide, then compare with your income change to see directionally how you are doing.
CPI vs personal inflation
CPI measures price changes for a broad national basket. Your personal inflation index measures price changes for your basket. If housing is a bigger slice for you than the national average, your personal inflation can run hotter even when CPI looks calm. See the dedicated CPI vs personal inflation breakdown for when to use each.
How category weights work
A category’s weight equals its share of your total spend. The tool multiplies each category inflation by its weight, then sums the results to reach your personal inflation. Learn more in category weights explained.
Two quick examples
Housing-heavy basket
Housing 40% at 8%, groceries 20% at 4%, transport 15% at 3%, other 25% at 2%. The weighted personal inflation lands near 5.4%, higher than a 3% CPI headline because housing has a big weight.
Food-heavy basket
Housing 25% at 2%, groceries 35% at 7%, transport 20% at 3%, other 20% at 2%. The weighted personal inflation lands near 4.3% because groceries carry more weight than in many CPI baskets.
Use these as direction only, then enter your real numbers in the tool to see your own index and compare it with your income change.
How to interpret the result
If your personal inflation is above your income growth, your purchasing power is under pressure. If it is below, your purchasing power improves. Keep the number directional, and read how to interpret personal inflation for more context.
FAQs
How often should I refresh my personal inflation index? ▼
Update it when your spending mix shifts—after a move, a lease change, or a big lifestyle tweak.
What if I don’t have exact spending numbers? ▼
Use reasonable estimates and round numbers. The goal is direction, not precision.
Can personal inflation be negative? ▼
It’s rare but possible if your weighted categories drop in price. Treat it as directional and sanity-check the inputs.
How does it relate to real income? ▼
Comparing personal inflation to your income change shows if your purchasing power is rising or falling.
Where do I run it? ▼
Use the Why Am I Getting Poorer tool to enter your categories and inflations.
Estimate your personal inflation now
Enter your categories, weights, and inflations to see your index and compare it to your income change.
Want more context? Read CPI vs personal inflation or revisit the full guide.