What effect does inflation have on me?

by | Mar 12, 2024 | Future Planning

The rise in the prices of goods and services and, subsequently, the fall in the purchasing power of each dollar is called inflation.

As inflation rises, every dollar will buy a lower quantity of goods or services than it did in the past.

Inflation is one of the main factors that reduce the value of your money over time. It means that the money you have at the beginning of the year will buy you less goods and services at the end of the year.

As the prices of even basic goods go up over time and during periods of high inflation, even if you carry on with your normal life – eating the same food, travelling to the same places, etc. – either you need to buy smaller quantities, cut down on the total items you purchase or end up spending more.

We’ve all heard a story from someone we know about “how much fish n’ chips or a bag of lollies used to cost when they were young” – this is inflation, at work.

Jayden Allison CFP®
MFinPlan, BCom (Eco&Fin), Dip. FS (FP)
Financial Planner

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