Inflation is the biggest deterrent to any financial planning. It has an effect on all aspects of life and demand for a proactive approach to evade its impact.
To ascertain inflation of household expenses we largely focus only on the few basic expenses like Fooding, clothing and housing and consider its impact on our overall household or personal expenses. But there are few expenses which have prominent share in our household budget today, like the expenses on medication, education and lifestyle to name a few. Likewise there might be few expenses which are relevant to a particular family only.
We calculate inflation at 5-6 per cent per year, in fact, inflation for different segments and families may vary. For this very reason, the financial plans made by your friend for his family may not work for you.
A good practice is to identify your own expenses heads and how inflation affects your family specifically considering these expenses heads. We only need to factor such expenses and its increasing scale into our financial planning.