Why Do People Save Less During Inflation

[angrybirdy]

In my opinion, I don’t think the bank’s interest can follow inflation, and it may be the reason why they don’t increase interest rates for people that save when inflation is high. I don’t know the country you live, but sometimes it depends on the country you are. Like in my country, inflation will continue to high and the interest rates will not increase. Our money will be in the bank, but what they can afford to buy will continue to increase.

The rate at which inflation is increasing is actually losing the savings that people have made without spending them.If we look at the way inflation is increasing, the interest rates in banks and the salaries of employees should also be increased accordingly so that we do not get crushed under the burden of inflation.We believe that the policy of the central bank and the interest rates do not increase or decrease due to inflation.It depends on all factors including economic conditions and bank expenses.We all worry that the money deposited in the bank is losing its purchasing power and inflation does not depend on the interest rate.

well, for me, it is true that there is an issue of inflation, which makes things tough for employees and households in saving... It is seen that even when one does not spend excessively and keeps their money savings in the bank, the value gets reduced due to high prices of goods and services especially now. This becomes difficult because the cash we save now might lose the value and purchasing power in the future. in my view, it is necessary that our salaries or other income get increased according to the high costs of living, while the banks increase interest rates on savings. However, it is also seen that there are various other economic factors which affect interest rates.

[Mikky02]

Mostly  in the aspect of spending now mindset the economy gives individual such mindset today the price of goods can't be compared to two years back and it keeps increasing each day so hereby decreasing the saving mindset, mostly expenses one never budgeted pops most at times and people run back to their savings inflation has really damaged the way people save mostly the average citizens so the spending now mindset in this present economy happens to be the best

[trendcoin]

Interest rates aren’t keeping up with inflation. Gold has been stagnant for a year. Home prices are rising at a rate below real inflation. The job market is shrinking. We’re truly in a very interesting period. It’s very difficult to invest during this time. I think it might be more profitable to get through this period by buying goods, but I’m undecided about what to invest in. Investing in a product that has market value, can be easily sold once markets recover, has a long shelf life, and is easy to store, and then waiting may yield higher returns than investing in just about anything else. For example, I’m considering buying and storing welding wire, but I’m not entirely sure and remain undecided. Or, if I had a business idea in mind, I’d buy machinery today from someone who’s selling theirs because they’re struggling to keep their business afloat. Since I don’t have any of these things, my assets are dwindling. Like everyone else, I’m at a loss...

[fruktik]

How do you expect them to do that. In there time, they didn't experience modern tech like we do today that's why during their time when they buy TV and basic electronics items at home, they get fascinated by it. Now, we have more than enough, many of us don't even sit at home to watch TV again. We spent time online streaming movies, we don't even want to visit cinemas again unless there are special movies like a Premier movies, we have everything at our finger tips.

We are lucky that Bitcoin and many investment surround us, most old people didn't make any investment, they only save money and use it to buy what they have plans for, they don't buy shares because they don't even understand it from the beginning. We of this generation understand what's more than what's investment and we hate inflation so much. I think inflation rate are more talk and seen in our time than it was before.

If the older generation doesn’t understand how to use modern technology, why aren’t they willing to start learning about it? Is it really that hard? After all, no one is forcing them to write a dissertation on a complex topic. It only takes a few minutes a day to figure out how to use a modern smartphone. And once they do that, they’ll have access to information and can learn about stocks and investments. There’s nothing complicated about it. All it takes is the desire to keep up with the times.

[Thewatchman]

1. Savings lose value
Cash in the bank grows slower than prices rise, so it buys less later.

I am not sure that many of the people who are still saving up their money in banks during periods of inflation are aware that their money loses value in banks as it grows slower, there are many people who still have the mindset that saving is the way out of for them from their poverty or poor situation But saving really helps no one especially when inflation is on the rise and only those who understand these economic principles are able to understand that investment is one of the way out of inflation.

4. Less to save
Bills go up faster than wages, so there’s less leftover at month-end.

This for me is a primary reason for this because someone who has only one source of income would struggle during the period of inflation because expenses will go up and money will leave your account faster than it gets in.

This is also a very critical point you’ve made so far saving money in this present economy is suicidal because of the loss of value in Naira. You can save your money all you can and you will not be able to purchase the basis of the common man.

Bills are piling up everyday with Ann increasing rise in cost of products making it very difficult to keep money so it doesn’t loss it value in purchase of wants and needs.you cannot save up due to how commodities are inflated in the country. People who have the habit of saving money cannot enjoy it this period because of limitations in purchasing goods.

We can save all we care but inflation will always be a determining factor, making it a necessity to regulate the demand and supply in the market. A country that has failed to regulate inflation in in due cause of having a difficult market policy. You are guaranteed to save less during inflation because it controls the market money of demand and supply in the country economy.

[batang_bitcoin]

if I had a business idea in mind, I’d buy machinery today from someone who’s selling theirs because they’re struggling to keep their business afloat.

That is easy to say but it might not only be about the funding but also the actual operation. You may want to look at their financial statement and balance sheets to see if they're still profitable as to why they're selling it if it's. The reason most businesses are closing these days are due to the lesser demand. The economy isn't really doing good for most people and they can't keep up with the cost of materials and it's cost is passed on to the consumers for which they can no longer avail it and this is how this high inflation is affecting everyone.

Since I don’t have any of these things, my assets are dwindling. Like everyone else, I’m at a loss...

Just as you, I am with you and also feeling the loss at these periods. Just hoping that we can survive this just as how we survived covid.

[Etranger]

If the older generation doesn’t understand how to use modern technology, why aren’t they willing to start learning about it? Is it really that hard? After all, no one is forcing them to write a dissertation on a complex topic. It only takes a few minutes a day to figure out how to use a modern smartphone. And once they do that, they’ll have access to information and can learn about stocks and investments. There’s nothing complicated about it. All it takes is the desire to keep up with the times.

I think older people genuinely find it hard to get to grips with new technology, and the reason goes much deeper than it seems. It's not that they don't want to learn how to use a smartphone. The real issue is that it's very hard for them to grasp what technology actually means to young people today and the role it plays in the lives of professionals in their 20s and 30s. However diligently an older person studies these new gadgets by the manual, they will inevitably lag behind younger people. I think it's precisely this realization that puts them off.

[fruktik]

I think older people genuinely find it hard to get to grips with new technology, and the reason goes much deeper than it seems. It's not that they don't want to learn how to use a smartphone. The real issue is that it's very hard for them to grasp what technology actually means to young people today and the role it plays in the lives of professionals in their 20s and 30s. However diligently an older person studies these new gadgets by the manual, they will inevitably lag behind younger people. I think it's precisely this realization that puts them off.

It’s not just that older people will fall behind the younger generation; it’s simply a matter of convenience. For example, these days you don’t have to go to a bank branch to pay your rent. All you have to do is open the bank’s app on your smartphone and pay for all your bills there. It takes just a couple of minutes, and you don’t have to stand in line like those people who still haven’t learned how to use modern technology.

[Nokku]

1. Savings lose value
Cash in the bank grows slower than prices rise, so it buys less later.

2. Spend now mindset
People buy today because waiting usually means higher prices.

3. Money shifts to other assets
Many move cash into gold, property, or foreign currency to protect value.

4. Less to save
Bills go up faster than wages, so there’s less leftover at month-end.

Why do bank pay back less when inflation gets high? Why they do not increase the pay back percentage with time?
What you people usually do with the money instead of saving it during inflation?

increasing payback interest is depend on central bank. people can't save money during inflation because there daily expenses increase at the same time. deposit to bank is not a proper way to increase money. better invest to other asset like gold, land, bitcoin etc. where inflation rate is high investment in bank doesn't give anything good. bank is not your way to improve your financial condition. they collect idle money by the name of FDR, DPS etc. so investment in asset is the best solution of making money faster.