The following table shows the effect of inflation on the average moderate and medium income families. The column on the far left shows the typical items on which these families spend money. The average percent increase shows average annual percent increase.

* Moderate Income Family ** Medium Income

Percent Average Percent

Monthly Of Percent Monthly Of

Outlay Budget Increase Outlay Budget

Food & Dining $ 530 20.90% + 9.5% $ 750 12.50%

Shelter & Household 580 23.00 + 9.9 1,290 21.58

Transportation 200 8.00 +18.0 460 7.60

Clothing & Personal Care 200 8.00 + 3.4 380 6.30

Medical Care & Insurance 100 4.00 + 9.9 260 4.30

Other Consumption 140 5.60 + 6.7 380 6.20

Federal & State Income Tax 510 21.00 +10.8 1,580 20.33

Other Taxes & Social Sec. 240 9.50 +17.7 560 9.33

Savings & Investments -0- -0- -0- 340 5.66

TOTAL $ 2,500 100.00% +10.6% $6,000 100.00%

* Assumes a moderate budget, with annual expenditures of only $30,000 for a family of four. Averaging percent of increase reflects the rate at which each category of expense increased. Source: Touche Ross & Co, public accounting firm.

** Assumes a medium budget, with annual expenditures of $72,000 for a family of four. Note percent differences in spending.

Source: Financial Planning Consultants, Inc.