How Inflation Affects Us?

        I know you heard about Inflation in a T.V. news or you read it in a newspaper, but maybe you don't care and did not try to understand what it is. Now this is the right time, na dapat makialam ka na at alamin kung anu ba itong Inflation and how to defeat this inflation. Before we go to the topic, I give you a definition of Inflation from Investopedia & Wikepedia;

From Investopedia;
"The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. Central banks attempt to stop severe inflation, along with severe deflation, in an attempt to keep the excessive growth of prices to a minimum."

From Wikepedia;
"In economics inflation is a persistent increase in the general price level of goods and services in an economy over a period of time."

         Sa madaling salita "Inflation" yun tinatawag na pagtaas ng mga bilihin from basics needs hangang sa mga iba pa nating pangangailangan sa ating pamumuhay.

         Did you know how Inflation Affects us?  I know you feel the effect of inflation, but you just keep quiet and let it pass year by year. Maybe one reason is because your company gives you an increase every year, that's why you didn't care for it anymore. But if you realize it, the increase in your salary is just a money illusion. Why? They gave you increase, but the price of your basic needs also increases. 
         It means, yun karagdagan suweldo sayo ay sapat lang upang makabili ka pa din ng mga pangangailangan mo kahit na tumaas na ang presyo ng mga ito, katulad ng pagkain, pamasahe, kuryente, tubig at iba pa. The question is? May nagbago ba sa sitwasyon mo ngayon na tumaas ang suweldo mo, wala di ba? paulit ulit pa din dahil ang totoo hinde naman nadagdagan yun kita mo kahit na every year ka nagkakaroon ng increase sa suweldo.

          Inflation is silently pulling you down you never notice or expect it, but it slowly brings you down. Even your money in your own regular savings account in the bank also cannot escape from this inflation. See image below from the National Statistics Office (NSO) report of average inflation rate. 

         I know you will ask and so How this will affect me and my Savings in the bank? I'll give you a simple example.

         Let say monthly you save Php 1,000.00 in one year you have Php 12,000.00 Wow! ang laki na ng naipon mo. Let say with interest of 0.375% per year sa loob ng isang taon ang kinita ng pera mo ay Php 45.00. So you have now Php 12,045.00 yan ang pera mo sa bangko sa loob ng isang taon. Pero ito ba talaga ang actual value ng pera mo? Let consider the table above for the average inflation rate for the year 2012 which is 3.2% . To get the actual value of your money for 1 year we add the interest and deduct the inflated cost. [Php 12,000.00 (Total Amount of Saving) + Php 45.00 (interest @ 0.375) - Php 384.00 (Total Amount of Saving x 3.2% inflation rate) = Php 11,661.00 (actual value of your money)].

Note: This is a rough computation it is for illustrative purposes only to show how inflation can affect your savings.

        So you see in the sample computation na bumaba yun tunay na halaga ng pera mo and your money is actually beaten by inflation. I just want to emphasize that don't just let your money sleep in a bank, invest it slowly in any investment vehicle that is convenient to you, so that your money truly grow and beat inflation. Start asking & learn the different type of investment option that can truly defeat Inflation. "We cannot avoid Inflation but we can fight back and defeat Inflation by learning how to Invest & where to Invest".    
                                                                       

       Hope you learn something about Inflation through my blog and see you in my next post. Thanks for reading & God Bless to you....

Disclaimer: I’m not a financial expert adviser, I’m the same as you looking for the best option where I can put my money to make it grow and I found out through investing and now I’m at the stage of studying & learning the different investment option.      


Read Also:
Why We Should Invest?
Money Saving Tips
How to Start a Savings?
Money Saving Issue for Pinoy

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