How Inflation Impacts Your Savings?

Inflation is reducing the purchasing power of households at the quickest rate in four decades.

The Consumer Price Index, rose 8.6% in May from a year earlier, the Labor Department reported. 

"Rule of 72" measures long-term effect. This regulation applies to investment returns. It's a rough estimate of how long it will take to double money at a specific pace.

Here is how it operates: The amount of time it takes for an investment to double is calculated by dividing 72 by the yearly interest rate.

Consumers can estimate how quickly inflation will half the value of their money. Subtract 72 from the annual inflation rate. 

Charlie Fitzgerald III, a certified financial planner told that the rule of 72 works whether you're indicating an inflation factor or expanding your money.

Rising prices don't affect all households equally. Depending on what they buy, some households may have a lower (or higher) personal inflation rate.

Wage growth and savings earnings help balance inflation.

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