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We all feel the effects of inflation: Groceries cost more, childcare seems to be a luxury service. But that’s subjective. To nail down the real-world impact of inflation, economists like to compare rising prices to salaries, which are more static. This is where the wage inflation calculator comes in. The tool illustrates how much buying power your earnings currently have compared to past years.

We’ll take a closer look at how wage inflation calculators work and what they can tell us about making a living in the U.S. in 2024. We’ll also examine what inflation is and how much wages have grown compared to home prices, gold, and other metrics.

What Goes Behind an Hourly Wage Inflation Calculator

A wage inflation calculator may go by other names, such as an inflation wage calculator, hourly wage inflation calculator, minimum wage inflation calculator, or a wage adjusted for inflation calculator. But they’re all the same. You can see an example at https://www.bls.gov/data/inflation_calculator.htm.

The calculator is one way to represent inflation, which is the change in price of goods and services. It tells you how much buying power a dollar amount has on a certain date compared to another date — usually today or a year-over-year equivalent. For example, someone may enter their hourly wage on Jan. 1, 2010, and then compare how much that same wage bought them on Jan. 1, 2024.

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Historical Inflation Rates, Compared

The table below shows the annual rate of inflation from 1920 to present. See the next section for more information on how to read the table.

How to Read Our Historical Inflation Rate Table

To understand the table shared above, first you need to know what CPI means. The Consumer Price Index comes from the U.S. Bureau of Labor Statistics (BLS), which began collecting family expenditure data in 1917. The annual average CPI-U in the second column represents Urban CPI data. The annual percent change between each year’s CPI represents the rate of inflation.

How to Calculate Hourly Wage Adjusted for Inflation

Using a wage inflation calculator is an easy way to see how our income’s buying power changes with inflation. Just enter the starting year of your choice, your hourly wage, and then the current year.

Let’s say someone was making $25 per hour in 2018 and wants to know what the equivalent hourly rate is in 2024. In this case, making $25 per hour in August 2018 is equivalent to making $31.21 in August 2024. Assuming the individual makes the same money today, this shows that the buying power of their hourly wage has decreased over the years.

If you’re negotiating a raise, you could argue that $31.21 is the minimum you should be making to keep up with the cost of living.

What Is Inflation and How Does It Work?

Inflation represents changes in prices of services and goods throughout the economy. The way the government measures inflation is by comparing the current cost of goods and services to prices in previous years.

Inflation weakens the purchasing power of the dollar, as consumers have to pay more for things than they did in previous months and years. Inflation can also deflate the value of cash held in savings accounts.

What Is Actual Inflation?

Actual inflation is a term used to refer to what the current rate of inflation really is versus what consumers perceive the current rate to be, or their “inflation expectations.” Consumer expectations influence actual inflation.

Hyperinflation

Hyperinflation is a term used when rapid inflation occurs. This is when prices rise uncontrollably over a period of time. Hyperinflation is extreme — 50% a month or more — and fortunately rare.

The U.S. has never experienced hyperinflation, and no one believes it’s on the horizon. The most recent example of hyperinflation is Venezuela, where inflation reached 65,000% in 2018.

Deflation

Deflation is the opposite of inflation, when prices of goods and services go down. The U.S. experienced deflation of 7% (or -7% inflation) during the first few years of the Great Depression.

Recommended: What Is Stagflation?

How Is Inflation Calculated?

The formula for measuring inflation is:

•   Percent Inflation Rate = (Final CPI Index Value/Initial CPI Value) x 100

How Is Wage Adjusted for Inflation Calculated?

It’s complicated. The easiest way to calculate a wage adjusted for inflation is to use an online wage inflation calculator.

How Inflation Impacts You

There’s some confusion surrounding whether inflation is good or bad. Some inflation is normal, and shows that the economy is growing. But for consumers it feels like a bad thing. It can be especially worrisome for borrowers with variable-rate-interest debt like student loan debt.

Economists can measure the impact of inflation on consumers in a number of ways. You’ve probably seen articles discussing college tuition vs. inflation, which show how American incomes have not kept up rising education costs. Other metrics tell similar stories.

Let’s look at a few different metrics that reveal how consumers may feel the impact of inflation.

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How Your Wage Is Doing Relative to the Housing Market

Inflation can sneak up on consumers when prices at grocery stores rise slightly. But they really feel it when making a large purchase, such as buying a home. People who have saved for many years to buy a house find that their income and savings are no longer enough to reach their home buying goals.

That’s because median home prices have far outstripped median wages: Nationwide home prices have grown 129% since 1960, while household income increased only 39%. This may have been great news for our parents and grandparents, who saw their real estate investments soar. But for today’s first-time homebuyers, it’s a disaster.

Also, mortgage interest rates can rise during periods of inflation.

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How Your Wage Is Doing Relative to Gold

Because gold tends to hold its value, it makes a good unit of measurement for economists. By converting wages to gold, we can get a better sense of how wages have held up, or not, over the years.

In 1965, the minimum wage was equal to 71 ounces of gold annually. Given the price of gold in 2024, that’s equal to a salary of $179,491.55. Compare that to the current federal minimum wage of $7.25 per hour, or $15,080 annually.

How Your Wage Is Doing Relative to CPI

Remember, CPI represents consumer prices. Inflation impacts prices of essential goods and services such as groceries, gas, and childcare. This means that salaries and savings don’t extend as far as they used to. This is why many people push for raising the minimum wage during periods of inflation.

If you’re looking to take control of your money during inflation, a money tracker app can help you gain valuable insight into your financial life.

The Takeaway

Inflation, and the rising prices that come with it, means your income doesn’t buy as much as it used to. Using a wage inflation calculator is one way for consumers to get a more objective idea of how much buying power their hourly wage has during periods of inflation. Of course, inflation doesn’t affect all prices equally. That’s why economists use different metrics to measure inflation’s impact, such as the Consumer Price Index (CPI), the housing market, and gold.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

How do you calculate wages adjusted for inflation?

Using a wage inflation calculator can make it easier to get insight into how much buying power an hourly wage has in the current economy. With a wage adjusted for inflation calculator, it’s easier to understand what someone’s income is currently worth compared to prior years.

How much is $15 an hour in 2000?

According to the CPI Inflation Calculator from the U.S. Bureau of Labor Statistics, $15 an hour in August 2000 is equivalent to $27.33 of buying power in August 2024.

What is the inflation rate for 2024?

The current inflation rate for 2024 is 2.5%. This is based on the 12 months ending August 2024.

How do you calculate real hourly wage from CPI?

Wage inflation calculators take the current CPI and past CPI into account to help consumers calculate their real hourly wage.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SORL-Q324-047

When you’re buying a home, you probably have a million questions that need answering, especially when it comes to getting the proper insurance to protect your investment.

Soon-to-be homeowners may see both title and homeowners insurance on the lending documentation and wonder what the difference is between the two. While both types of insurance can provide vital coverage for homeowners, they differ vastly in their purpose and protection.

What Is Homeowners Insurance?

A homeowners insurance policy protects a home and personal property from loss or damage. It may also provide insurance in the event someone is injured while they are on the property.

Here are some common things homeowners insurance may cover:

•   Damage that may occur in the home, garage, or other buildings on the property

•   Damaged, lost, or stolen personal property, such as furniture

•   Temporary housing expenses if the homeowner must live elsewhere during home repairs

Depending on the policy, homeowners insurance may also cover:

•   Physical injury or property damage to others caused by the homeowner’s negligence

•   An accident that happens at home, or away from home, for which the homeowner is responsible

•   Injuries that take place in or around the home and involve any person who is not a family member of the homeowner

•   Damage or loss of personal property in storage

Some coverage may also apply to lost or stolen money, jewelry, gold, or stamp and coin collections.

Buying Homeowners Insurance

While someone can legally own a home without taking out homeowners insurance, the mortgage loan holder may require the homeowner to purchase an insurance policy. Typically, lenders do require this as a condition of the home loan.

It’s important to understand that homeowners need to insure the home but not the land underneath it. Some natural disasters — tornadoes and lightning, for example — are covered by typical homeowners policies. Floods and earthquakes, however, are not. If you live in an area where floods or earthquakes are common, you may want to consider purchasing extra insurance to cover damages from potential disasters.

Special coverage may also be worthwhile for those who own valuable art, jewelry, computers, or antiques.
There are two policy options that can help homeowners replace insured property in the event of damage or a loss. Replacement cost coverage covers the cost to rebuild the home and replace any of its contents, while actual cash value simply pays the current value of the property at the time of experienced loss.

When it comes time to shop for and buy homeowners insurance, start by asking trusted friends, family, or financial advisors for their recommendations. Do some online research, too. Before you make a final decision, contact multiple companies and request quotes in writing to compare their offerings. That process can give you a good idea of who is offering the best coverage for the most affordable price.

Recommended: Is Homeowners Insurance Required to Buy a Home?

What Is Title Insurance?

Title insurance provides protection against losses and hidden costs that may occur if the title to a property has defects such as encumbrances, liens, or any defects unknown when the title policy was first issued.

The insurer is responsible for reimbursing either the homeowner or the lender for any losses the policy covers, as well as any related legal expenses.

Title insurance can protect both the homeowner and lender if the title of the property is challenged. If there is an alleged title defect, which the homeowner may be unaware of at the time of purchase, title insurance can provide protection to cover any losses resulting from a covered claim.

The policy will cover legal fees incurred if there is a claim against the property.

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Buying Title Insurance

Both home buyers and lenders can purchase title insurance. If the home buyer is the purchaser, they may want to insure the full value of the property. (The value of the property will affect how much the policy costs). When the lender is the purchaser, they typically only cover the amount of the homeowner’s loan. When it comes time for a home buyer to purchase title insurance, they have full choice of the insurer.

According to the Real Estate Settlement Procedures Act (RESPA) of 1974, the seller cannot require the home buyer to purchase title insurance from one certain company.

Lenders are required to provide a list of local companies that provide closing services, of which title insurance is just one. But it may be worth doing independent research. Lenders may not select their recommendations based on the home buyer’s best interest, but instead because a service provider is an affiliate of the lender and provides a financial incentive in exchange for a recommendation.

Again, it’s a smart idea to seek the counsel of friends and family and do online research to uncover competitive prices and learn which service providers have a solid reputation.

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The Takeaway

Homeowners insurance is an ongoing cost (billed monthly, quarterly, or annually) that helps cover damage or loss of the home and possessions within the home. Title insurance, on the other hand, can help protect against losses caused by defects in the title and is a one-time fee payable during the closing process. The advantage to having both types of coverage is that each policy can protect homeowners against financial loss in very different circumstances.

Shopping for homeowners insurance often requires considering several options, from the amount of coverage to the kind of policy to the cost of the premium. To help simplify the process, SoFi has partnered with Experian to bring customizable and affordable homeowners insurance to our members.

Experian allows you to match your current coverage to new policy offers with little to no data entry. And you can easily bundle your home and auto insurance to save money. All with no fees and no paperwork.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

Now that remote and hybrid work have become the new normal, you may find yourself spending a fair amount of time in your home office. Is it up to snuff?

Ideally, you want your home office to both inspire your creativity and allow you to get down to business. Unfortunately, many of us are still working from cramped, messy, and makeshift at-home work spaces.

If your home office space could use some sprucing, read on. Here are 10 simple makeover ideas that can transform a drab at-home work area into a well-organized and stimulating work space.

1. Refreshing the Home Office

For those lucky enough to have a dedicated home office space, it may be time to give that area a little refresh. Even though corporate office spaces tend to be a little drab, a home office doesn’t have to be.

Painting a home office a cheery color and making the space feel homey with the addition of a couch, a rug, or pictures on the walls will make a home office a welcoming place to spend your working hours.

Of course, a home office needs to be practical, too. Finding an organization system to keep office supplies and files neatly stored will provide some much needed peace of mind during busy work days.

When setting up a home office, it can be helpful to think about what systems were appealing in the workplace and which were more of a hindrance. Customizing the space to fit personal preferences and needs is one of the perks of working from home.

2. Taking Over the Guest Bedroom

For those who don’t have a separate room to dedicate to a home office, it can be tricky to strike a clear balance between work and play. Working in the bedroom or on the family room couch can make it difficult to mentally separate work time from personal time.

A guest bedroom can be an ideal spot in the home to add a desk. The space is likely unused most days of the year and you can easily shut the door during the workday when you need privacy. You can also shut the door after a long day of work when you need to feel like you are at home and not at work. Out of sight, out of mind.

A guest bedroom may also be easy to keep tidy, as most members of the household probably don’t spend too much time in that room of the house.

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3. Renovating the Garage

If a guest bedroom isn’t an option, a garage may be an ideal space to build a home office. This project may require renovations, but this space feels very separate from the rest of the home, which can be appealing.

Adding flooring, installing heating and cooling systems, and adding lighting — task and ambient — may go a long way towards making this space both comfortable and functional. A coat of paint in a color that promotes productivity might help, too.

4. Rethinking Your Desk

For homeowners with a big family or apartment renters who are embracing the studio lifestyle, it might be hard to squeeze in another large piece of furniture. A kitchen table or dining room table can serve double duty and provide plenty of space to spread out.

If multiple members of the household are working from home, this large space can even act as a coworking space of sorts. After all, bumping into a loved one in the break room (aka the kitchen) might be a nice surprise during a stressful workday.

The key to making this work is to make this “office” portable. Having a tote bag or storage box to stash any work supplies at the end of the day will be ideal when it’s time to eat dinner. Finding ways to remove those work vibes from a personal space is important for fostering good work-life balance.

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5. The Right Support

No matter what place in the home you decide to make your workspace, it’s important to have supportive seating. Having the right chair can make all the difference, and in many cases function is much more important than aesthetics.

Having a chair that was specifically designed to provide proper back and neck support during long work days is key.

An ergonomic chair that includes features such as adjustable height, tilt control, lumbar support, and solid padding can all make the workday a bit more comfortable.

6. Setting the Scene

While having the right tools — desk, chair, computer, etc. — is important to building a successful home office, working in the right atmosphere is important, too. Spending the first 10 minutes of the workday setting the scene can be a major game changer.

For those working from home while other members of the household are working, attending virtual school, or simply existing loudly (hello, adorable but noisy babies), creating an appropriate workplace atmosphere may lead to better focus and productivity.

Start by giving the workspace a little spruce and clear out any unnecessary clutter. Put on some light background music that isn’t distracting (think classical or nature sounds) to block out any unwanted noise. Write a to-do list that prioritizes tasks for the day.

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7. Being Zoom Ready

Having a space that is appropriate for video calls is essential for looking professional at home. Zoom, Skype, or Microsoft Teams calls don’t have to take place at a desk if the background isn’t ideal. Present your best self in a quiet spot in the home with good lighting and a clean background.

8. Getting Inspired

In an ideal world, all workspaces would inspire workers, allowing them to feel creative. One of the advantages of working from home is the ability to have more control over the surroundings, making it an inspiring, creative workspace.

Decorating the space in your favorite colors; adding photos of loved ones, favorite vacations, or hobbies; incorporating a vision board; or keeping a brainstorming journal at the ready are some ways to make the environment one where there is room for creativity and inspiration.

9. Adding a Standing Desk

In your home office, you make the rules. If you don’t want to sit for eight hours a day — who can blame you? — using a standing desk or adding a standing desk converter is a good way to incorporate some movement into the workday.

10. A Room with a View

Last but not least, setting up a home office to take advantage of any pleasant views might bring some peace, calm, and inspiration into the space. Facing a desk towards a window, French doors, or any other space in the home that has a view of the outdoors or even just greenery in another part of the home can be stress reducing.

The Takeaway

While some employers might offer stipends or reimbursements for setting up a home office properly, many employees may have to foot the bill themselves. This expense can be worthwhile, but may not be one that many workers planned for.

For those who need help financing that new home office space or purchasing furniture, there are a few options that may be worth considering.

One option that can work well for a small to midsize project (like a home office renovation) is a home improvement loan. This is essentially an unsecured personal loan that is used for home repairs or upgrades. You receive a lump sum up front which you can use to fix up or refurbish your home office; you then repay the loan over a set term (often five to seven years) with regular monthly payments. Interest rates are typically fixed.

If you’re interested in exploring your personal loan options, SoFi could help. SoFi’s home improvement loans offer competitive, fixed rates and a variety of terms. Checking your rate won’t affect your credit score, and it takes just one minute.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

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Even people who closely monitor their spending might go over budget now and then. What’s important is how they handle getting back on track.

If you go over your budget, there are a few different steps you can take to get back on course. And combining some of them might help speed up the budget repair process. Here’s what you need to know.

Keep an Eye on Spending

Reviewing account balances and statements once a week is an easy way to keep track of money coming in and money going out. A few big purchases can easily upset an otherwise balanced budget.

Waiting until the end of the month to check in on accounts leaves you at risk for excess spending and potentially overdrawing a checking account or having a higher credit card bill than you anticipated.

Checking in once a week leaves time to self correct and adjust the budget to help balance the numbers.

Identify What Went Wrong

Going over budget sometimes means there’s uncertainty about where the money went. Overspending can mount quickly, putting the budget out of balance. It might only take a few extra additions to your grocery cart, an unexpected car repair, or a couple of splurge purchases.

When there is general overspending or if it’s just in a specific budgeting category, looking at recent bills and credit card statements might help identify where the money was spent. Were there too many restaurant meals, increasing food spending as a result? Was there too much temptation to shop online sales? Identifying budget lapses can make it easier to avoid them in the future.

💡 Quick Tip: Help your money earn more money! Opening a high-yield bank account online often gets you higher-than-average rates.

Cut Unnecessary Expenses Temporarily

When a budget is too restrictive, it can feel punishing. A budget can account for the unnecessary spending that makes life fun like travel, dining out, shopping, gifts, and beauty treatments. If these expenses create a problem in the budget, you can temporarily cut back on those categories. Once your budget is balanced again, those expenses can be put back into the mix. Balance is key.

Use a Budgeting Tool

A free budget planning app can help you customize your spending categories and even keep track of your bills. It will send you updates on your progress and let you see where your earnings and spending go each month. This can make creating a realistic budget even easier.

Build an Emergency Fund

One thing you can do to get back on track after going over budget is to make sure you have an emergency fund for financially difficult situations, such as expensive medical bills or necessary home repairs.

Emergency funds can also be used to prevent emergencies. For instance, an emergency fund might provide extra support if a debt payment is at risk of being paid late, which could incur fees and interest and add to your debt load.

💡 Quick Tip: If you’re faced with debt and wondering which kind to pay off first, it can be smart to prioritize high-interest debt first. For many people, this means their credit card debt; rates have recently been climbing into the double-digit range, so try to eliminate that ASAP.

Explore Different Budgeting Techniques

Sometimes the trick to sticking to a personal budget—or bouncing back after going over that budget—is to try a different budgeting method. Not all methods work for all personality types. Take some time to find the right budgeting fit, even if the first few rounds don’t go according to plan. There are a few different popular budgeting methods that might help someone get their budget back on track, such as:

1. Line-item budget. This is probably what most people think of when they think of a budget. With a line item budget, the income and expenses are usually in a spreadsheet format where each expense is listed by category with the goal being not to exceed spending targets in any of the categories.

2. Proportional budget. This type of budgeting system requires dividing monthly income into three categories—needs, wants, and savings—based on percentages. The budgeter will allocate a spending percentage to each category and aim to stick to that budget. A common proportional budget is the 50/30/20 budget, with 50% of income going to needs, 30% to wants, and 20% to savings.

3. Paying-yourself-first budget. For those who want to keep their budget simple, this method is pretty straightforward. You simply “pay yourself first” which means you put money towards savings or financial goals first (perhaps 25% of your take-home income). Then you can spend the rest of your income exactly as you need or wish to.

4. Envelope budget. This technique provides a hands-on approach to spending that can be helpful for people who tend to swipe their credit card without fully realizing the potential consequences. With the envelope method, you use envelopes to hold cash that represent different spending categories. You then make all your purchases for the month in cash. If an envelope runs out of money, spending in that category stops until the next month — unless you borrow money from another envelope, limiting spending in that category.

5. Zero-sum budgeting. With zero-sum budgeting, you “spend” every dollar you have, allocating each one to a specific purpose, like adding money to your savings account. Once every dollar is allocated, there are zero leftover dollars, hence the name zero-sum budgeting.

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Cut Out Temptations

Temptations happen, and it’s generally better to learn from budget mishaps than agonize over them. However, if there is a certain temptation that seems to rear its ugly head again and again while wreaking havoc on your budget, it might be time to send that temptation packing.

Common Triggers of Overspending

There are many things that might trigger overspending, but some common ones to look out for might be:

•   Email sale and coupon promotions

•   Social media advertisements

•   Friends who pressure others to spend

•   Grocery shopping when hungry

•   Shopping when emotional

•   Shopping as a reward

💡 Quick Tip: When you feel the urge to buy something that isn’t in your budget, try the 30-day rule. Make a note of the item in your calendar for 30 days into the future. When the date rolls around, there’s a good chance the “gotta have it” feeling will have subsided.

Launch a Side Hustle

For someone who wants to get their budget back on track, a side hustle can be one way to bring in more cash and maybe even build valuable career skills and opportunities. Launching a side hustle might allow you to pursue a passion outside of your day job while benefiting your budget.

The Takeaway

Sticking to a budget can be challenging. If you go off track, don’t beat yourself up over it. Instead, determine what went wrong and how you can prevent it from happening in the future, cut your expenses for a few weeks, and figure out the best method to get your spending and savings back on track. You may even want to try another type of budget that could be easier to follow going forward.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.