Topic: What is The Negative Effect of Inflation on Household Savings? - page 4. (Read 1298 times)

People do realize that prices seem to go higher all the time, they remember the days in which they could pay a specific price for a product and now they see that product is many times more expensive, what they do not know are the reasons this happens and what to do about it, if they knew I would guess many more people will take proactive steps to protect their wealth, but since they do not, they just accept inflation as an inescapable fact of life, not realizing the huge mistake this really is.

So true. Many people do not realize the dangers of inflation in the long term, the loss of the value of money stored in the bank, which ultimately results in the time spent working such long hours being wasted. Usually people like this lack education about finance or they already know about it but are afraid to take risks because of course investing has a higher risk than putting money in the bank.

In fact, investment is very important not only to fight inflation but also to make the future better because investment will create financial freedom later. There are many investment options to fight inflation, starting from gold, but the one that has the most potential to create financial freedom is investing in bitcoin. Inflation of course not only impacts a country but also households, so it is important to prepare by looking for additional work and investment.

I don’t think any profit that will come from bond investment or any type of investment that involves third parties is not advisable because there is no financial freedom.
Bitcoin and crypto investment will give you more profit and financial freedom than any offer from government.
Our money in our bank accounts are constantly loosing their values de to inflation, and some taxes and charges from commercial banks, therefore, let’s leave banks and focus on either real estate investments or Bitcoin investments to save the value of our wealths.

Some people have allocated their household saving as emergency fund and scared for using as investment assets, has each allocated as emergency fund or savings assets and some allocated for investment assets. Most of consequence getting when put our money in saving assets and hold it the bank account without increasing the values and must get risk how inflation drop year by year.
I don't think difficult problem with withdrawing investment assets when any emergency needed, saving fund easily for withdrawing but the same with investment fund exactly hold it in cryptocurrency you can sell when do you want without waiting longer time.
Change bad habit with saving money in the bank and move it as investment assets indeed the right opportunity increasing much profitable than have take risk with inflation values when saving in the bank.

It is a very big mistake if a person uses all their savings for investment purposes because as you said, savings are not supposed to be used for investments because emergencies can come at any point in life, and when that happens, one would need funds for the emergencies, and in such situations, one wouldn't be able to withdraw their funds from the investments they've made which is why it is important to have savings.
If one can afford this, they should have two funds, one should be their savings and the other should be for investment purposes, so that when they invest their investment funds, they would still have their savings intact and in emergencies, they can use those savings.

You would really be needing to be wise if you are really tend to fight off when it comes to inflation or something with that economic issues on which it would really be causing up for  you to suffer out
if you do tend or wish to consider on staying up on your casual method on earning. Its true that savings could really be having that kind of opportunity chances that you could be able to make use of that amount for you to be able to make out some investment so that you would really be able to make yourself having those different income streams on which it would be causing for you to have that kind of option.

When you do have a family then of course you would really be thinking up wisely on how you would really be doing on sustaining and supporting your family needs
on which this would be something that would really be so crucial i must say.

I'll go with the second option. Save a little and invest the rest. I believe that is the wisest thing to do. It would be so bad if you had little money, at least in savings, so that if anything had to go wrong in the future, you would stretch your hands in there and settle the problem without having to risk your investment. Investments are for financial elevation, which is why it is essential to invest. Both investment and savings are necessary, which is why it is important not to put all eggs in one basket, they should be done alongside each other.

The truth is that, inflation is not just good, even when you invest in bonds or capital market and when you get your return in investment, it will still be cut up by inflation. so the whole idea of allowing inflation to go on and thinking you can invest to beat inflation sometimes doesn't work well like that.

So the best solution is to tackle the inflation head on, first is to stabilize the economy and the monetary value of the currency. Inflation does not have a good part because it renders people savings hopeless, it increases cost of production and manufacturing, it increases transportation of goods and services and whole lot more. So for me government should help to bring policies that can stabilize the economy and make people savings worth it, because the act of saving is for you to have something for the rainy days and is an economic policy to survive and have more capital if you want to do business later.

Of course this is very disappointing for us because we have worked for so long and the savings we have have lost their value when we want to spend on something. This is a situation that we cannot predict and we have to face this and the impact caused by inflation is really very difficult. in managing income during inflation and the savings we have will decrease in value when inflation occurs.

Choosing to save and also invest some of the income we have in Bitcoin is really a good choice in maintaining the value of the assets we have in the face of inflation and some people who may not have the courage to invest their savings because they don't understand Bitcoin well, but for those who have can understand well how Bitcoin works, of course they will invest their savings and leave a little for emergency needs so they can carry out investments well.

The biggest problem in this scenario is people's wages often do not keep up with the pace of inflation. If all the products and services around you are going up by 10%, but your employer is only bumping your pay by 3% then your earning power has decreased. If that happens 2-3 years in a row then it can have a large effect on your cost of living and spending power, which might turn into a large quality of life change. Thankfully in many countries we are starting to see the trend reversing and normalizing again.

Duh.

Where do you even begin to list all the negative effects that inflation brings to a common family, household savings-wise? I mean from the get-go you're literally getting blasted in the ass by high prices, which if you're not really paid handsomely in that 9-5 you're working your ass off you'd be forced to scrape every centimo you have on your savings account. Even worse, and this is especially evident in countries like America where they are basically trolled by their healthcare system, for instances where you need to get hospitalized (and yes, inflation still plays a part in this) you're forced to spend every single dollar you have on your name just to get that ambulance to fetch you, some even opt to book Uber for a ride to the hospital because it's astronomically cheaper than having to pay 500-1000 bucks for an ambulance ride alone.

Inflation also inadvertently makes a family's fiat savings worthless, as they make your general currency less valuable. If all your savings are on the dollar and you didn't have any other assets to protect yourself with you're donezo, you're going to sit at a million dollars' that's not even worth a million dollars, if you're catching my drift.

And we're barely scraping the tip of the inflation iceberg here, I could go on and on about every single effect inflation could inflict upon your savings', but one thing's for sure, if you don't take care of yourself, your money, or your valued assets, you're going to be eaten alive by the economy.

Imagine just working for 10-15 years, and then suddenly a horrible high inflation happens and whatever you have saved until that moment becomes peanuts. This is what many people all around the world lived, in many countries. I have to say that people literally wasted their decades for this and got nothing in return and that's why it's so bad.

I believe that the best thing to do would be saving in bitcoin because of this exact reason, so that you wouldn't lose it all, would make no sense at all if people did that. I personally believe that the best thing to do would be never to get out of crypto in general, it would not give you anything good in return. I get why people want something more tangible, but it's just not a good idea.

I think this is already a common sense topic. Of course, the inflation rate will have a bad effect on household savings, especially if the cost of living keeps on increasing. Expect that a family will make a decision to use their savings and eventually not notice that their savings are gone. Stable one job is not enough in this current society. Everyone who aims to have a better life in these days should have to find a good and profitable side job or part-time job, and of course investment. If you aim to have a better life, then having the mindset of having an extra income is a must. Saving is not enough; save money if you have excess money, because what is the point of saving money if you will use it unwillingly eventually? It's common sense to instead try to invest in or have a business in which you are confident in order to have a better life.

For me personally, we were doing fine maybe a year or so ago, everything looked fine, I was even making less money, thanks to my boss I am making a little bit more these days and I am very grateful. However, due to insanely high inflation at my country, it ended up being so high that I can't even pay for my debt let alone live with it. So for the time being, I make a debt every single month, that includes savings as well because there is no way that I can recover these days, so I might as well buy some bitcoin and pay less debt.

In the end, I am aware that it will pass, there will be moment when my income will go over my expense, it always happens like that, sometimes income is higher and sometimes expense is higher, eventually it all balances out. We just need to wait it out.

It is not right to keep a currency that has lost value. It is necessary to invest to regain the lost value or not to lose it at all. There are many ways to invest. In my country, they generally invest in precious metals and try to fight inflation in this way.

I agree with what you said about education because many people don't know that their money loses value. By the time they realize it, it's too late. This education should be given to everyone and these people should be made economically conscious.

Bonds are an alternative funding other than bank loans, the issuer uses these funds to develop their business or something that can provide a profit for them. The profits obtained from bonds are also relatively stable compared to other investment instruments or are only able to stem wealth from inflation. Unexpected risks from bond investment also need to be considered, such as the issuer being unable to pay and repay the interest to the bond owner due to business development being hampered or even failing along the way.

Investing in bonds is not the best advice for me, I have carefully considered all the worst possibilities of investing in bonds. I agree more if you give Bitcoin investment advice rather than bond investment. Bitcoin investment can also be done regularly using the DCA method.

agreed with this some people don't have idea that their saving are decreasing in value as the time goes, they just saving some of the money let it be and find out that the thing they sought after are increasing in price, they think its natural because all the thing is increasing as well but if they have invested at least deposited it to some means that give them at the very least few percent APY then it could spare them from the increasing price since their money gonna grow.

this is honestly an education that should be primarily taught in college or high school for real so many people actually have no idea until they went through some basic knowledge in regard of economy only then they realize.
if anyone want to save money they should save it in form of gold and i don't mean jewelry gold, but literal gold with certificate approved by reputable institution only then it will retain its value.

If we don't have any savings at all, of course it will be even more difficult when facing inflation because all sources of needs have increased and we cannot meet the needs we need. Of course this will make it very difficult for us to meet our needs and I agree with your method. overcome by having a small amount of savings from our current income and investing to prepare for inflation situations and can also help with emergency needs that we might need without knowing exactly when this will happen.

basically money will continue to lose value because the amount will continue to increase. Anyone who understands economics should already know this.
and then people will think about putting their money somewhere that will make their money stay the same or even increase.
This will always happen all the time, but not everyone really knows about it.

Since inflation causes the decrease on the purchasing power of our savings, there are two ways to deal with it, one of those ways is to not have any savings at all, something the majority of the people do, but the issue with that strategy is that even the smallest setback can cause tremendous harm to you and your family, the second way to deal with this is to save a small amount of money, like a few months worth of your salary, and invest the rest, this is way better in my opinion as if you make the right call then not only your capital will grow, but you will be able to deal with most emergencies as well.