I saw an interesting comment by Ole Peters that inflation is just one number when really it should or could be adjusted to one’s stage of life. The effects of inflation for a young family (who may be trying to buy a house for example) will be very different than for a student or a pensioner. Come to think about it, a nominal figure of 5% will obviously not affect everyone in the same way. Everyone will have a different figure.
I suppose, also, how much money you can borrow and leverage (that is, how much and how cheaply you can buy that money) will also be determined by your stage of life.
I’ve started tracking my costs on a monthly basis. I doubt that I’ll be able to see any percentage difference from month to month in costs (too many variables). And in any case, I might spend the same but simply get less of it which I won’t notice in an excel sheet. Hopefully over time, though, I should be able to see what my cost of living is, if it is getting more expensive, and, if so, in which areas. I may even be able to work out year-on-year what the increase was – which will have more value than the single inflation figure in the news.
Knowing what our own individualised inflation rate is, what would that tell us? What could we do with it to in order to gain from that knowledge?