The same holds true with the average person's second-largest cost: transportation. If you have a fixed payment for your auto loan, you've stopped inflation on that part of your budget. If you've financed your car purchase with a home equity line of credit, your rate is probably variable and could rise. So could the costs for gasoline and repairs.
Food, clothing and health care are affected by inflation. But you can control the amount you spend on discretionary items such as entertainment, savings and charity.
Add up the amounts that you've tagged as being either fixed or discretionary and compare those with the total to determine how inflation-vulnerable you are.
If the bulk of your costs are exempt from inflation, there's no reason to do more. But if you find that more than half of your budget could be affected by rising costs, you might want to make some changes.
The most obvious would be to refinance variable-rate debt into fixed-rate -- or simply pay off those variable-rate loans.
"If you batten down the hatches by fixing your major expenses -- your mortgage, auto loans and other debts, you can survive an inflationary environment," said Marilyn Cohen, president of Envision Capital Management in Beverly Hills.
Because inflation is a risk, not yet a reality, there's no need to be rash, she added. Just look for opportunities to refinance when financing rates are cheap. In the meantime, you might want to pare back spending to pay down debt when refinancing is impractical.
Your investment portfolio should also have an inflation-fighting component, Cohen said.
Popular inflation-fighting investments are gold and commodities, real estate and Treasury Inflation-Protected Securities, also known as TIPS.
It's easy to explain how TIPS fight inflation. The interest rate on these securities floats above the consumer price index, ensuring investors that their value will keep pace with inflation, but it never exceeds inflation by much. Cohen's not a fan, because she thinks you can do better.
The other investments don't move in lock step with inflation. But the demand for gold and commodities rises when people are concerned about maintaining their buying power, she noted.
Cohen thinks exchange-traded funds in gold and commodities have more "bounce for the ounce" than TIPS. They're also far more volatile, however, so investors need to be quick on their feet, getting out when it appears that inflation is under control.
The other thing investors should do over the coming year is consider selling their long-term bonds, Cohen said.
"Inflation is the bane of the bond market's existence," she said. When interest rates rise, the value of old (relatively lower-rate) bonds falls, she said. The longer the maturity on the bond, the steeper the drop.
Again, because there's no rush, investors can sell "in a measured way," allowing some bonds simply to mature and selling others when market conditions are good, she said. That would free up cash to reinvest when inflation does hit and interest rates start to rise, providing investors with more generous yields.
"It's not time to press the panic button, but that's why you do it now," she said. "Anyone managing their own money has to be aware of the fact that what's fashionable today may not be viable tomorrow. Timing does matter."