Topic: What is The Negative Effect of Inflation on Household Savings? - page 2. (Read 993 times)

  Depends on the type of bank you use and the type of the saving account. In some of them there would not be any effect since a characteristic of the saving account would be the adjustment with the inflation rate. But in some of them , the real value of your money would decrease. Imagine having money that will gradually lose its value unless you actively invest it in a business. If you work an 8 hour job you probably don't have time or the ability to start a successful business, and therefore have a huge incentive to consume and buy goods immediately, so that your money doesn't lose its purchasing power. The biggest problem is that if you expect prices to go up rapidly you just buy commodities. Certainly no one would buy a bond or lend money since the principal would be wiped out in purchasing power by inflation.
  A small amount of inflation is actually necessary for economic growth. At zero inflation, money sitting in an account can be more valuable than taking an economic risk. That reduces investment. The flip side of inflation is interest, which is the inducement to invest. When the economy is not running at capacity, meaning there is unused labor or resources, inflation theoretically helps increase production. More dollars translates to more spending, which equates to more aggregated demand. More demand, in turn, triggers more production to meet that demand.

The major reason behind this is that those who have money will never realize that everything is getting expensive until they spend all their money without planning. So this fact can be felt by poor people only because they know the value of money better and they know that how difficult is to fulfil the needs and eat well in such situations of inflation.

People often spend more and more but when they needs some money for necessary work then they does not posses such amount for managing that thing therefore one should realize and should teach his children also that saving and investment has greater importance in their life to handle an expenses during the condition where you needs money.

right if inflation will high then it will effect on our saving in the bank, securities exchange and other markets. just i keep saving some portion of my assets otherwise i mostly invested in cryptocurrencies, i know it's high risky to save money in the bank, profits is also big. still i can't buy gold but i am interested.

One of the most common mistake to have is that on the time that you do become that confident when it comes into your financial status and have been able to forget about having some savings then sooner or later
you would really be able to see the importance of it but of course not all the money you would really be needing to save it up because it would really be wise that you should really investing or having a business
then you would really be able to make yourself having no problems when it comes to savings since you could really be able to sustain and having the money if ever there would really be some emergencies.

When it comes to inflation then this is something inevitable and it would really be just that normal with these economic problems and this is why it would be
that better that you should really be wise when it comes to this manner so that you would really be able to save up your ass with this economic problems.
Increasing goods and products in prices and services would be inevitable, this is why the only way you could fight it is to have more income so that you could be able to patch it up.

This should be made clear if you are saving to invest or saving for emergencies, then the effect of inflation on saving for emergencies will be less because it is not something you will have for ever because you use the money most times but if the money is then for investment, then inflation will hit it so hard that it might not even be enough for you to even invest it again because you can not really predict the price of whatever commodity you want to invest in that particular time.

and if your money loses its value, then your aim has been defeated. and that is why they always give suggestions for investing in bitcoin and over time, if you make a profit, you can always bail out and go for your initial plan. and the way bitcoin is trending, and they are asking people to invest If you do not invest now, it will come to a time when it will be more difficult for you to invest. It is better to make a choice now and invest, except if funds are stopping you, then you can invest later.

It's true, imagine what you could have done with your currently salary but five years ago? If I made this salary 5 years ago, I would have been so rich that I would be able to buy a car every one year, just from my savings. Obviously I live in a high inflation nation, and not like some Swiss person who doesn't feel it too much.

I think this is why we should consider that savings in fiat is not a smart move, this is why I keep my money in bitcoin, it makes it a lot better. I get that it is not that simple and we are going to feel some pain eventually if we are not careful, but if we could make it work then we are going to benefit from it eventually. Life will always be tough and we are going to need help if we do not consider inflation.

Apart from that, I am sure that all of us here must have free line work outside of normal and profitable activities. Of course, when we have more funds, we sometimes forget to save the funds, some of which are for precautionary funds and we put all of them into the market for trading. Well, if market conditions are like this, it usually goes awry because the decline occurs beyond our expectations and the saddest thing is that we have to leave when there is an urgent need at home.

Every day, inflation devalues your money.  Think saving is safe? It's pouring faster than you blink. The "implicit tax" is a quiet robber that steals your savings and reduces their purchasing power

As if that's easy, invest in bonds or the capital market. While profit-seeking is appealing, let's not ignore the risks. They could be financially devastating and cause sleeplessness. Not all financial issues can be solved by investing. It requires informed decision-making with the knowledge that success is not guaranteed

The great finale: buy bonds because Central Banks will slash rates if inflation declines. The market has a way of making even the most confident predictions look foolish. The play's what? Jump into investing with eyes wide open, aware of the threats but ready to take them? Or rely on dwindling savings accounts? Your option, but in this economy, every choice is risky

I think if you compare stock investment with bitcoin investment, for those who understand and understand clearly, bitcoin will be the main investment. But we cannot ignore the expertise of someone who is already familiar with stocks, so he will say that stocks are better. I and you already understand and know that Bitcoin is the best investment at the moment, and it cannot be denied, but maybe those who are experts in other fields, if they understand, will also say the same thing. This is just because someone doesn't know, so there are different choices about investment.

source: investopedia

This image is a clear example of why you should not save money (it doesn’t matter if you save it in the bank or at home). If you want to save money, let it be an emergency fund. Asides that, it’s smart to have your money invested. Look at how you have to keep doubling your money to buy coffee as time goes on. But then look at it from the other angle of being the coffee company. You can see how they are the ones enjoying because they got established long ago and will continue increasing their coffee price according to inflation while people have to work more to purchase it.

There is some investment that doesn't lose rather it keeps appreciating over the time let say investment to connected with real estate or landed properties, this types of investment never keep you on a lost rather increased your profitability.
Investments that concerns owning a business well the risk factor is equal you can make 100 percent profits and lost 100 percent of your profits why because the risk can never be determined so, while doing your research on the types of investment you should do then you have to think smart and quickly to know the kind of investment you should venture on.

Saving is not bad. What is bad is saving in the wrong place. The best way to save is when you save your money in a place that generates some percentage of that money every day. In some cases, you can call it investing your savings. By now, i know we understand that just keeping money in the bank is useless. The funny part is that these local banks use the money in the bank to do a lot of business and invest. Why don't you, the owner of this money, use it for your own good? After all, there are mini-businesses or upcoming businesses one can invest in to help the business grow and collect shares.

Bond investments are more risky as stocks and bonds are linked to inflation in the country. Also generally not everyone can buy all bonds. Before the issue of bonds the issuing company or company itself decides to whom they will sell the bonds. Accordingly the approval of the bond is taken from the concerned regulatory body crypto investments are better than bonds. There is no impact here. Bitcoin investments are safer than bonds.

Inflation hits harder than the present world. Investment is important and have scrapped out the surfaces of inflation temporarily, especially working smoothly for those that have mainly build themselves to become independent, disciplined and watchful for the nearest future. Investment have soared higher than the presentable outcome in question, not everyone can be opportune to know about the system except those close and sharing stronger bonds within each other. Savings doesn't count because there's possibly high inflation in the country and devalue our initial savings.

Apart from having to buy food items and other household supplies at a more expensive rate, trying to save or invest in a business might be difficult and if the household does save little in the bank, it is sure not to yield any profit but incur charges and deductions from the saved up money.

The best way a household can save despite the inflation and its negative effects, is to buy BTC after dividing the household income to include a portion to save in a bank or some in some place of safety and another for DCAing for future investment.

Not a bad plan but one that many people will find impossible to put in action, this is because even if what you say makes sense, for what I can tell most people do not want to learn about how the markets work and take the responsibility of investing their money, and with good reason as most of them will lose it all or they will give their money to scammers, so in a way the average person is trapped, they are saving fiat which they know losses value every day, but at the same time they cannot invest that money out of the fear of losing it.

I don’t really see any future with bond investments, I am afraid. Yes it’s less risky and more stable but I believe more risk equates to more profit and I do want more profit. I am trying to grow my money for the future so bitcoin is the choice for me. Not stocks and most definitely not bonds.

Saving money and keeping it in the bank is definitely an unprofitable activity. This is because the value of your money gradually decreases over time, which can be understood after saving money for a long time And due to this inflation, individuals face losses. So it is more important to invest money somewhere better than to save it. If you can invest your money in good places then you are most likely to get profit from this money over a period of time. Maybe you can invest your money in Bitcoin if you want. As a result, you can earn maximum profit without any effort. You can see all the past graphs of Bitcoin if you want. By analyzing Bitcoin and investing at the right time, you can maximize your profit. Also if you want you can buy a good place with your money. Through this you can also utilize your savings properly.

Inflation will definitely occur every year, so saving in the bank is not a good solution because it will definitely lose value. Indeed, we need savings, but this is only for emergency funds and daily needs. It would be better if we had savings and investments to create financial freedom.
My parents never saved in the bank, they preferred to invest by buying land and gold, so they could pass it on to their children. And I also want to apply it like my parents did, but the difference is that I want to increase my investment in Bitcoin so that this asset can be passed on to my children in the future. Because for me, investment in any case is very important because with investment we can fight inflation.

You made some good points here but you should understand that investment also comes along with some kind of consistency because you can't just own an investment and abandon your investment and in the process of trying to build a solid investment, it will still require saving some amount of money in the bank till you get your desired capital to start up an investment because a lot of people doesn't just wake up overnight and start making investments because they also need adequate planning and fund raising so during this processes of accumulating funds in other to own up an investment still require storing money in the bank so inflation or no inflation, we can't completely run away from the bank.