Inflation is currently surging in the United States and around the world.
The Federal Reserve aims to keep inflation at less than 2%. However, over the last 12 months, prices were up 5.4%, the biggest jump in annual inflation in nearly 13 years. Compared to a year ago:
- food prices are up 2.4%
- prices for dining out rose 4.2%
- housing in the largest US cities climbed nearly 15%
- gas prices are up 45.1%
Of course, inflation isn’t distributed equally – some prices have surged much more than others. For example, used car prices rose 45.2% over the last 12 months.
Inflation is soaring partly because we’re coming out of a short and intense recession, which makes year-over-year comparisons somewhat misleading.
And prices for some items like airfare (up 24.6%) and hotels (up 15.1%) are actually below where they were before the pandemic.
But the risk of prolonged inflation is unsettling. Inflation squeezes our spending dollars and cuts into other financial goals like saving, investing, and paying off debt.
Most experts (and the Federal Reserve) believe inflation will be temporary and may have already peaked. However, some experts worry we’re entering a new era of higher inflation. You can find strong arguments on both sides.
Tips for keeping ahead of inflation
Unfortunately, individuals can’t fully avoid inflation. But beyond updating your investment strategy (which comes with its own risks – consult an expert), there are practical steps you can take to keep your cash flow in check even with rising prices.
First, keep an eye on your expense trends over time – weeks, months, and years – to see if rising expenses are cutting into your cash flow and financial allocations. Several spreadsheets below can help with this.
Second, keep a closer-than-usual eye on your everyday spending. You want to stay on top of spending more than ever during an inflationary period.
That’s because, despite best intentions, “consumers really don’t remember what prices they paid for products,” according to Dartmouth College professor Kusum Ailawadi in an interview with Marketplace.org.
As prices go up, it’s easy to spend more without realizing it. But the “more involved you are in the purchase of any product, the more you’re going to notice the price,” Ailawadi said.
And as Kristin Schwab notes for Marketplace.org, “consumers who want to save will have to put in the effort.”
Spreadsheets powered by Tiller automatically import your spending into spreadsheets, so you can very easily track spending by categories such as “groceries,” “gas,” and “dining out.”
By tracking your expenses with Tiller, you can find ways to spend smarter rather than simply spend more, even as prices rise nationally.
Third, consider using a personal budget to closely track cost-of-living changes. If you faithfully budget, it’s likely you’ve already noticed and can quantify an increase in your cost of living. If you don’t already follow a budget, try the Foundation Template from Tiller.
It’s easy to use, keeps your finances updated in Google Sheets, and includes both monthly and yearly budgets.
Spreadsheets to Visualize Spending and Cost-of-Living Trends
The following free Google Sheet templates from the Tiller Community can help you take a more detailed look at your spending trends.
They’re designed for Google Sheets automated by Tiller Money Feeds, but if you don’t already use Tiller, you can give it a try completely free for 30-days.
Depending on the financial institution, Tiller will import your last 90 days of financial data. Your transactions will then update daily over the course of your free trial.
If you track your finances in a spreadsheet but don’t want to install any new templates, you can always create a simple pivot table to compare spending trends over different periods. Here are simple instructions for comparing spending with a pivot table.
Cost of Living and Cash Flow Forecasting Spreadsheets
Retirement Planner Spreadsheet
The Retirement Planner template from Tiller Money Labs estimates the total value of your investments into the future. You can experiment with different growth rate scenarios and project outcomes in real-time. See the template here →
Cash Flow Forecast Spreadsheet
The Cash Flow Forecast spreadsheet forecasts your cash flow into the future, so you can project various income/expense scenarios over time. See the template here →
Spreadsheets to Track Spending and Cost of Living Trends
Average Daily Spending Trends Spreadsheet
Quickly visualize your daily average spending trends in a Tiller-powered Google Sheet, so you can optimize your budget for long-term success. See the template →
Monthly Analysis Report
Drill down on your budget, actuals, or remaining organized by type, group, and category plus see how your budget and spending have changed month to month.
This is powerful because you can track changes by group, such as “Living” or “Discretionary,” or drill down into each category such as “Groceries,” “Gas,” or “Dining Out.” See the template →
Period Comparison Report
The Period Comparison template allows you to compare budgets, actuals, and budget-net-actuals over two user-defined periods with sorting and sparkline functionality. See the template →
Category Comparison Report
Easily compare your actual spending by category from two time periods of your choosing. See the template →
See your spending for all categories over the past five weeks and a glimpse at the relative trends within each category. See the template →
Weekly Analysis by Category
A view of your spending for a selected category over a chosen period of time. It also provides a handy average of your spending over that time period. See the template here →
Year to Date Comparison
Budget-versus-actuals analysis for the calendar year to date. See the template →
Yearly Insights Spreadsheet
The Yearly Insights solution builds a summary of the previous year’s or current year-to-date earnings, spending, and some other useful information about where you spent money and how much you spent in each category. See the template here →
Category Tracker Report for Google Sheets
Dig deeper into spending for any selected category by reviewing Transaction details over an adjustable time period. See the sum of spending for all categories for a given date range. See the template here →
Spending Comparison Report for Google Sheets
Gain a better understanding of spending by comparing trends across two time periods. Gain insights and see which categories and groups changed the most and least. See the template here →
Yearly Category Chart
This sheet shows you a chart of your actual vs budget for a single category over the course of a year. For non-regular categories which vary from month to month, this sheet gives a quick visual representation of how you’re doing.
Join the Conversion!
How are you managing the new wave of inflation? Do you think it’s a passing phase, or do you think inflation (or even hyperinflation) is here for the foreseeable future?