What is inflation and how does it affect your finances?

We all want to earn as much money as we can and make the most of it by investing it wisely right? But, have you ever asked yourself, are there factors that actually work against me in achieving my financial goals? Well, sadly, the answer to that is yes!

One of these negative factors I want to talk about is inflation. What is it? How does it affect your financial goals of investing and making a lot more money? I will answer these and many more questions in this post.

What is it?

I don’t know about you but for some reason, when I think about inflation I think of air and balloons. But no, really. Inflation is no joke.

It basically means that the prices of goods and services are on the constant rise and the citizens’ salary is not enough to cover their basic needs. These relate to obtaining these goods and services.

How can we actually perceive if we are being affected by inflation?

It is obvious that you cannot just go around life and say that you are being affected by inflation just because you are not managing your finances well.

There are ways to measure if a country is being affected by inflation and that is measured by considering the power to purchase each person has and what I mean with this is the amount of goods and services you can purchase with the money you have at hand will determine if you are being affected by inflation or not.

If your purchasing power is not high enough to cover your basic needs, then you are definitely being affected by inflation.

How can I invest my money wisely so that inflation does not affect me

There are ways to go against the current when it comes to inflation and you definitely need to consider them if you actually want your money to have enough value for you to be able to purchase goods and services.

One way to fight against inflation is by investing the money you are earning in a different currency. If you earn Bolivares, then try investing them in dollars which is a way stronger currency that is not affected by inflation as much as the Bolivar is.