Most of us have used cable tv service providers at some point in our lives. I remember having my account on auto pay because it was easy and convenient. But then, many months later, who knows how long maybe it was a year, while perusing my checking account I noticed the charge. I was shocked at how high it was.

Naturally I called because I hoped this was an error and during my time on hold, I checked back at previous months withdrawals. While it started at the amount I remember, it had slowly creeped up every few months until it was way more than what I had agreed to. I felt taken advantage of and helpless because there was nothing I could do to get my money back. I was paying way more for the exact same service.

Inflation Is Sneaky

That is what it’s like living with high inflation except it’s not just one thing. It hits almost every aspect of your financial life, even your ultra ‘safe’ savings account. It is easy to overspend during times of high inflation by just purchasing all the same things you have previously. You don’t have to splurge to overspend and therefore it is difficult to understand how it happened. Groceries have increased, dining out, sports, services, clothing, etc.

The Dictionary definition of inflation is, “a general increase in prices and fall in the purchasing value of money.”

No matter who you are or what you do, inflation is nipping away at your money.

How Inflation Impacts You

Inflation is a sneaky foe that has only recently become a serious threat. Times like now (2021) it is especially important to be highly vigilant with your finances. Inflation hurts you in two main ways:

1) you spend more because expenses increase

2) the value of any cash you’re holding decreases

If you control your spending and plan to just hold onto your savings through times of high inflation, you’ll still be losing.

Inflation Eats Away At Your Cash

You want to protect your cash by investing it so that it can hopefully increase in value as well. If you let it sit ‘safely’ in a savings account (or under your mattress), inflation will silently eat away at it. An amount that was able to purchase XYZ last year, will only be able to purchase A PORTION of XYZ next year and an even SMALLER PORTION in the following year.

It’s important that you put your cash to work. If you’re worried about risk and losses, a good advisor can provide options that may calm your nerves.

No matter who you are or what you do, inflation is nipping away at your money. I hope we can all be on guard for the many ways this can sneak up on us. Prepare for a rainy day while the sun is still shining. This will help lessen the rain when it does come. 

Try Out Our Retirement Calculator

Have you heard the saying “the hardest part is getting started?” Every day you delay could be money left on the table and increased chances of outliving your money. Ultimately, our retirement calculator will give you a rough idea if you have enough to retire and if you don’t yet, we give you some options to get there. It takes less than a minute and the results are instant.

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