Ouch! Our family's inflation rate is 14 per cent

A common complaint about the Consumer Price Index is that it doesn't truly reflect the impact of inflation on our everyday spending.  The CPI fluctuates from month-to-month but has historically averaged 2-to-3 per cent in Canada.  Your personal inflation rate may be a lot different than the national rate based on your consumption habits and preferences.

One of the benefits of using a budget is that you can analyze data from previous years to identify your expense categories that have been increasing.  I compared my household budgets from this year and last year to figure out my personal inflation rate.

Energy expenses

Our energy expenses consist of our electricity bill, natural gas bill and water bill.  Natural gas prices remained low this year, which helped keep our costs down.  This year our energy bills came to $239 per month, compared to $234 per month last year.

Net Energy Costs = up 1.8 per cent

Utility expenses

Our utility expenses include my wife’s cell phone bill, and our cable and internet bills.  We cancelled our landline a few years ago, and my employer pays for my monthly cell phone bill.  This year our utility bills totalled $178 per month, compared to $189 per month last year.  The savings were from renegotiating our cable and internet bills.

Net Utility Costs = down 5.1 per cent

Grocery expenses

Our grocery expenses include baby supplies and cleaning products.  I’ve really noticed an increase in grocery prices this year and it shows in our budget.  We spent $730 per month this year compared to $626 per month last year.

Net Grocery Costs = plus 15 per cent

Fuel expenses

I’m not usually concerned with fuel costs since it makes up such a small percentage of our budget.  We also made quite a few trips to Calgary this year, so the results may be skewed.  Nevertheless, we spent $143 per month on gas this year compared to just $78 per month last year.

Net Fuel Costs = up 83.3 per cent

Insurance expenses

Every year I call our insurance company to try to find ways to save on auto insurance.  Late last year I managed to lower my premiums by over 25 per cent.  Unfortunately our home insurance nearly doubled when we moved into our new house.  We spent $157 per month on car and home insurance this year compared to $142 per month last year.

Net Insurance Costs = up 10.5 per cent

It’s hard to determine if inflation is truly impacting your budget or if certain circumstances have led to an increase (or decrease) in expenses.  My personal inflation rate is just over 14 per cent, according to these variable expenses.  I’ll be keeping a close eye on these expense categories in the New Year to make sure this doesn’t become a trend.     

Have you looked at your personal inflation rate?

Also Read:

Rise in food prices to slow

5 economic trends that are affecting you

Robb Engen is half of the Boomer & Echo personal finance blogging team with his mother, a former financial advisor.  Reach him at robbengen@gmail.com