The prime minister said he was "taken by surprise" when he agreed to make a £1,000 bet over his Rwanda policy.
Rishi Sunak said he was "not a betting person", but denied it was a mistake after shaking hands with TalkTV's Piers Morgan that deportation flights would take off before the next election.
Speaking on BBC Radio 5 Live, Mr Sunak said he was trying to convey his "absolute commitment" to the policy.
Labour said it showed he was "totally out of touch with working people".
Mr Sunak dismissed suggestions that he did not understand financial pressures facing ordinary households.
The bet, which will go to charity, exceeds the £900 cost-of-living payments paid to eligible households on means-tested benefits.
The prime minister said he set the target to halve inflation by the end of last year because of cost of living pressures, and inflation had come down from 11% to 4% which "eases the burden" on families, he said.
Pushed on whether he understood the pressure on low income families, Mr Sunak says he was "sad" to hear about parents being so low on money they have been watering down baby formula for their infants.
He argued his government's cuts to national insurance had helped working families, alongside providing £100bn in support for "the most vulnerable in society".
"Taken in the round, there's lots of support for the people who need it", he said.
The pledge on inflation was one of the PM's five promises, alongside the policy of sending some asylum seekers to Rwanda. It aims to deter people from crossing the Channel, and is key part of Mr Sunak's pledge to "stop the boats".
However, the plan has been stalled by legal challenges, with no deportation flights taking off yet.
The bet was "underlining my absolute commitment to this policy and my desire to get it through parliament and up and running", Mr Sunak said.
In an attempt to revive the policy, the government introduced legislation declaring Rwanda a safe country but the bill needs to be approved by the House of Lords, where it has faced significant opposition, before it becomes law.
The government has said it is still aiming for flights to take off by the spring.
In an interview on TalkTV, Mr Morgan challenged the PM: "I'll bet you £1,000 to a refugee charity you don't get anybody on those planes before the election."
Shaking hands with the presenter, Mr Sunak said: "I want to get people on the planes."
Mr Sunak has said he expects a general election to be held in the second half of this year and one must legally take place by the end of January 2025.
Opposition parties have criticised Mr Sunak for taking the bet.
Liberal Democrat Deputy Leader Daisy Cooper said: "Most people when they are hit with a surprise £1,000 bill worry about how they are going to make their next mortgage payments or put food on the table for their children.
"Instead, the prime minister does not even register the significance of that amount of money. Out of touch does not even begin to describe Sunak."
The SNP said it had reported Mr Sunak for a potential breach of ministerial rules over the "grotesque" bet.
The party's Cabinet Office spokeswoman, Kirsty Blackman, has written to the PM's independent adviser on ministers' interests, Sir Laurie Magnus, and Cabinet Secretary Simon Case, calling for an investigation into whether Mr Sunak broke the Ministerial Code.
In her letter, she pointed to rules that state ministers should ensure no conflict appears to arise between their public duties and private interests, and that they should not accept any gift which could appear to compromise their judgement or place them under an improper obligation.