You may have heard about the current rate of inflation for the US economy, but it may not have answered one question in particular for you: how does that affect my money?
Here are two major ways inflation affects you:
Purchasing Power: Inflation refers to the rising cost of goods and services over time. Another way to think about this is the fact that as each year passes, it will likely cost you more money to purchase the same item than it did the year before. For example, what you could buy for $2 in 1957, might now cost you closer to $17.45, after years of inflation.
Protect your finances by saving for the future with an awareness that inflation will increase the price of what you pay for goods and services in the future.
Interest Rates: Inflation can reward those who save. But it can also punish those who borrow. The Federal Reserve tends to raise interest rates when inflation increases. This may mean more interest owed on your credit card debt and loans over time, unfortunately. Thankfully, this also means that your savings may also be growing at a rate higher than before.
Inflation is a normal aspect of our economy. Take time to adjust your strategies accordingly. You will never regret saving just a little more!
To learn about more ways to improve your financial life, visit the Syncis blog at https://www.syncis.com/blog.