Your Savings Might Be Growing… But Is Their Value?
Seeing money build up in your savings account feels like progress, and in many ways, it is.
But there’s something happening quietly in the background that many people don’t think about: Inflation
Even if your savings balance stays the same or grows slightly, the amount your money can actually buy may be falling over time.
That’s what makes inflation so easy to overlook.
A Shopping Basket We Can All Relate Too
Rather than thinking about inflation as a percentage, think about everyday life.
How much did these cost just a few years ago?
| Everyday Item | Approx. 2020 | Approx. Today |
|---|---|---|
| Cup of coffee | €3.00 | €4.50 |
| Loaf of bread | €1.40 | €2.20 |
| Family takeaway | €35 | €55 |
| Weekly grocery shop | €100 | €140 |
| Tank of diesel | €65 | €90 |
Your money may still be sitting safely in the back, but it no longer buys the same basket of goods.
That’s the hidden impact of inflation.
So, What Is Inflation?
Inflation is simply the gradual increase in the cost of goods and services over time.
As prices rise, every euro buys a little less than it did before.
It doesn’t happen overnight, instead it’s something that builds gradually over the years, often without us even noticing.
The Hidden Cost Of Holding Cash
Keeping cash aside is an important part of any financial plan, but it’s also worth asking yourself:
“Is all of your money in the right place?”
If your savings are earning less than the rate of inflation, your purchasing power gradually declines, even if your account balance increases slightly.
In other words, your money may be growing in numbers, but not necessarily in value.
Finding The Right Balance
This doesn’t mean cash is a bad thing.
Cash remains important for emergencies and short-term financial goals.
However, money that’s intended for longer-term objectives may benefit from opportunities to grow, depending on your financial goals and your attitude to risk.
The key isn’t choosing one or the other.
It’s finding the right balance.
How Oaktree Financial Services Can Help
Everyone’s financial situation is different.
That’s why there’s no one-size-fits-all approach to saving.
At Oaktree Financial Services Ltd, we help individuals and families strike the right balance between financial security today and planning for tomorrow, creating financial plans that reflect their goals and circumstances.
Tracy Sumstad is a highly qualified and experienced Senior Financial Consultant with over 20 years of expertise in the Finance Sector. Tracy is well-equipped to provide comprehensive advice on financial planning and corporate solutions. Her focus lies in helping clients identify their unique values and goals, empowering them to make informed financial decisions that protect and enhance their wealth and success.
