Inflation Calculator

There were times when a Somosa was costing us ₹10 near our school, and by the time we completed college, it was ₹15. Similarly, household expenses could be managed in ₹10,000 monthly for a family of 4, some 5 years back, and now that could have shot up to ₹15,000. This concept is called inflation.

Where income increases, and expenses also do, so while making a financial plan, it becomes important whether the insurance we are subscribing to today will be practically useful in the future, or even whether the return from a fixed deposit will beat the prices of inflation or not.

Inflation is one of the most pivotal points that every individual needs to take care of, even before opting for the right instrument to invest.

And that’s where Definedge’s FREE inflation calculator helps you get an estimate of how much money you need in the future to maintain the same lifestyle or spending power.

What is an Inflation Calculator?

Definedge’s Inflation calculator is a simple and easy tool that shows how the value of money changes over time because of a rise in prices – inflation.

Here, you need to simply enter:

• Monthly expense amount
• Current Inflation rate
• Number of years (your future outlook)

The calculator then estimates how much money you may need in the future for the same expense.

Definedge’s inflation calculator can be useful to get an estimate of future monthly household expenses, children’s education costs, retirement expenses, etc.

Let us understand with an example:

If your current monthly expenses are ₹50,000, the expected inflation rate is 6%, and the time period is 10 years.

Then after 10 years, those same expenses may require around ₹89,500 per month. You are not necessarily spending more; the value of money has changed over time.

And that is the effect of inflation.

Benefits of using Inflation calculator

The future is unpredictable, but having some visualisation of it beforehand will make us ready for it, a nd that’s where Definedge’s Inflation calculator comes into play; it helps you to:

• Estimate future expenses
• Plan long-term goals
• Understand the impact of inflation
• Plan retirement early
• Make realistic financial decisions

It gives you a better idea of how much money you may need in the years ahead!

Frequently Asked Questions (FAQs)

1. Why should I consider Inflation while planning my finances?
   Because the cost of goods and services increases over time, and today a good is costing ₹1000, it could be costing around ₹1200 in the span of 10 years.
2. Will the inflation calculator give an accurate number?
   An inflation calculator gives a ballpark number based on current inflation rates; future numbers could be even higher or lower.