Budgeting app Simplsaver is launching a ‘personal recession risk’ tool, allowing Aussies to see how much more their finances can stretch amid increasing inflation.

The tool weighs a person’s current budget against Australia’s inflation measure –  the consumer price index (CPI).

“When the cost of living goes up, there’s a metric to help us understand how much it’s going up by, but no one really thinks about it,” Simplsaver founder Leigh Stark said.

“We’re going to make that much easier by automatically doing the math and working out what CPI could do to your budget, and how much you’ll have left if prices keep on rising.”

CPI rose 6.8% over the 12 months to April, with the price of groceries, transport, and housing dragging it higher. 

That data is provided by the Australian Bureau of Statistics (ABS), which takes into account the prices of thousands of items across 11 major groups to measure changes in inflation.

The app's new recession risk tool predicts how a person’s budget would change if prices rise in certain categories, considering their salary and expenses.

Those who might end up spending more than they bring in if prices were to rise could be found to be at an extreme risk of recession, while those better positioned might face a low, medium, or high risk.

“We already have one of the fastest and easiest budget apps around,” Mr Stark said. 

“If we can make those budgets more predictive, we can break down budgeting barriers and help people ride the risk of recession into cooler, calmer waters.”

Simplsaver is available on the Apple app store for the iPhone.

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