How does inflation affect savings?

Inflation can have a negative effect on savings because it decreases the purchasing power of money over time. As prices for goods and services increase, the same amount of money is able to buy less. This means that the value of savings decreases as inflation rises. To combat the effects of inflation on savings, some financial experts recommend investing in assets that have the potential to appreciate in value, such as stocks or real estate, rather than keeping savings in cash or low-yielding savings accounts. Additionally, it is important to keep an eye on inflation rates and adjust savings and investment strategies accordingly.

The effects of inflation are often not directly felt but are played out over a long time, especially long-term investments are vulnerable to inflation.


At Horizon65, we created a mobile app that enabled you to check the effect of inflation on your savings.

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