How inflation impacts your savings

In this blog post, we show how you can lose 14% of your savings in five years, what you can do against it, and how JAVLIS can help you.

Through inflation, money loses purchasing power, meaning you get fewer goods for the same money. The higher the inflation rate, the faster the money is devalued, which has a strong negative impact on your savings.

Let’s look at an example:

You have saved $1.000,00 on your account and plan to leave the money there for the next 5 years. Assuming an average inflation rate of 3% over the next 5 years, you will have lost almost $160 in purchasing power. As it quickly becomes clear, inflation has a strong negative impact on savings in the long run.

This raises the question of what can be done.

There are, of course, many possibilities, but I would like to show four of them today.

Option 1

Save money, which means you reduce your expenses, in other words, the expenses that are not necessary, such as vacations, clothes, leisure activities, expensive cars, and so on. But if you’re honest, only a few people want to do that.

Option 2

You ask your employer for a higher salary to cover your higher costs. However, this option is minimal because not every employer agrees to that, and you don’t have a real influence on it.

Option 3

Invest your money in tangible assets such as stocks, precious metals, bonds, or real estate. This option requires a lot of time because you should deal intensively with these investments. Otherwise, there is the risk of a loss. In addition, these values also perform relatively poorly in the current situation of rising interest rates.

Option 4

You invest your money in JAVLIS because there you get simple and easy cash flow on your money, similar to a savings account with currently even 20% return per year which is significantly above inflation. In addition, you do not have to invest your valuable time in intensive research. The JAVLIS team is doing it for you!

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