Regular readers might remember when I wrote about inflation in May. The rising cost of goods and services continues to be a challenge for many families, so I thought it was appropriate to circle back.
As always, if you have questions and would like to talk with me about inflation and how it impacts your financial plan, I’m honored to help. Just follow this LINK to find a time for us to talk. I am always a fiduciary financial planner for my clients, I act as their advocate in all our work. I work to help them reach their goals safely and reliably. I would love to help you.
Most of us have noticed that it’s more expensive to fill our cars with gas and to fill the cart at the grocery store. But, really, how bad is inflation biting your family? It depends on where you live and the choices you make.
One way to find out is to calculate a Personal Inflation Rate. You probably have an inflation number in your head from something you heard on the news. But your number might be different. There are always plenty of headlines talking about the most shocking data available because people notice shocking things. And most “news” organizations are in the business of getting you to notice them. But the shocking data might not always apply to your family. So, looking at your PERSONAL situation is always more helpful.
All you have to do is tally up your spending for September 2022 and your spending for September 2021 and then compare them line by line. You will get more clarity on where your money is going in general and where you are seeing inflation hit your pocket. This spreadsheet gives you an idea of how the process would work.
| Expense Type | Category | Amount spent (March 2022) | Amount spent (March 2021) | % of total amount | 12-month inflation rate |
| Home | Rent | $0 | $0 | 0% | 0.0% |
| Home | Mortgage and property taxes | $0 | $0 | 0% | 0.0% |
| Home | Electricity/heating | $0 | $0 | 0% | 0.0% |
| Home | Water and trash service | $0 | $0 | 0% | 0.0% |
| Home | Telephone service | $0 | $0 | 0% | 0.0% |
| Home | Internet service | $0 | $0 | 0% | 0.0% |
| Home | Home furnishings and supplies | $0 | $0 | 0% | 0.0% |
| Essentials | Groceries | $0 | $0 | 0% | 0.0% |
| Essentials | Clothing | $0 | $0 | 0% | 0.0% |
| Essentials | Personal care (haircuts, bath products, cosmetics, etc.) | $0 | $0 | 0% | 0.0% |
| Auto/transportation | Gasoline | $0 | $0 | 0% | 0.0% |
| Auto/transportation | Auto maintenance/repair | $0 | $0 | 0% | 0.0% |
| Auto/transportation | Auto insurance | $0 | $0 | 0% | 0.0% |
| Auto/transportation | Registration/license fees | $0 | $0 | 0% | 0.0% |
| Auto/transportation | Parking/tolls | $0 | $0 | 0% | 0.0% |
| Auto/transportation | Cab fare/mass transit | $0 | $0 | 0% | 0.0% |
| Travel | Airfare | $0 | $0 | 0% | 0.0% |
| Travel | Hotels/other lodging | $0 | $0 | 0% | 0.0% |
| Travel | Car rental | $0 | $0 | 0% | 0.0% |
| Medical | Drugs and medical equipment | $0 | $0 | 0% | 0.0% |
| Medical | Medical services | $0 | $0 | 0% | 0.0% |
| Medical | Health insurance | $0 | $0 | 0% | 0.0% |
| Education/child care | School tuition, activitiy fees, etc. | $0 | $0 | 0% | 0.0% |
| Education/child care | Day care/nanny | $0 | $0 | 0% | 0.0% |
| Recreation/leisure | Dining out/takeout | $0 | $0 | 0% | 0.0% |
| Recreation/leisure | Recreation goods (electronics, pets, sporting goods, toys, etc.) | $0 | $0 | 0% | 0.0% |
| Recreation/leisure | Recreation activities (streaming services, pet services, movies, concerts, sporting events, etc.) | $0 | $0 | 0% | 0.0% |
| Other | Legal and financial services | $0 | $0 | 0% | 0.0% |
| TOTAL: | $0 | $0 | Total 12-month Personal Inflation Rate: | 0.0% |
You will create a couple of opportunities by doing this analysis. If you are like most families, you might notice that some money is going toward things that are NOT super important to you. This gives you a chance to cut back a bit on a couple of extravagances and focus on your priorities.
You will also discover how much your REAL EXPENSES have changed in the last year. You may not drive that much, so gas may not be a big deal. Maybe you don’t eat out, so that’s not such a concern. But, regardless, information will give you insight and insight gives you the chance to act more closely in alignment with your values. And that’s always good.
If you would like to talk with me about how inflation is impacting your financial plans, I would LOVE to do that. Follow this LINK to find a time for us to talk.
If you think you would like to talk to a couple of experienced, well-trained CERTIFIED FINANCIAL PLANNER™ professionals you could start a search here.
As you visit with financial planners, I suggest a couple things to check:
- Is the advisor always the client’s advocate – a fiduciary advisor?
- Is the advisor paid by clients, not by financial product manufacturers or distribution networks? That would be a fee-only advisor.
These two points help assure that you are working with a professional who is committed to your best interest at all times. It seems sort of obvious to me that a professional would work in this way, but it’s not automatic.
A fiduciary, fee-first, CFP® professional can help you make great retirement income choices and develop a comprehensive financial plan that is driven by your goals and priorities and addresses all aspects of your financial life. With a big-picture approach, you will be better prepared to understand your options at every step along the way.
Yes, I am a CFP® professional. I’m always a fiduciary and I work on a fee basis. And yes, I’m still taking on a few great families to be part of my financial planning practice.
If this article has you thinking about your own circumstances, contact my office at rdunn@dunncreekadvisors.com. I am always happy to meet with people who are working on their retirement plans. Dunncreek Advisors does not provide legal or tax advice, nor is this article intended to do so.