Effects of Inflation On Savings
9/18/2013 11:45:00 pm
Bismillah.
Assalammualaikum!
As you can see, from the headlines, Singapore is facing an increase in inflation of up to 1.8% in July 2013, which was from 1.6% in June 2013, as compared to back in 2012 when the inflation rate was 1.5%. This significant increase in inflation rate indeed affects all of us in every aspects in life, especially our savings. Why savings? Well, as all of you are aware, savings are important in our daily life. It is important to have savings to supplement our daily necessities ranging from your transportation, utilities, entertainment(f&b, shopping), family expenses and the list goes on.
What is inflation?
A persistent, substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency. (Dictionary.com)
Why do inflation affects savings?
Inflation affects our savings especially when we have to use our savings to purchase daily necessities which are always increasing in price due to certain factors of inflation such as the rising prices of oil affects our energy consumption such as oil for our car, electricity, etc. High demand of goods and services, the prices of it, also increases.
Take for example the recent haze chaos, whereby there are high demand for face mask and low supply of the face mask causes most businesses to take this advantage by increasing the price of the mask, making it only available to be purchased by people who can really afford the high price of the face mask. Inflation causes an unfair dealing of transaction which is if an advantage for the well-to-do people, and a disadvantage for the lower income people.
Inflation causes our savings to deplete faster than usual, to keep up with the high standard of living. This in turn causes the lower and middle income, difficulty in surviving with just one job of a lower pay. Recent surveys have shown that the standard of living is too high that not only the husband' salary is not enough and therefore the wife have to also go out and work, in order to help the husband to support the family. It is a current trend whereby both husband and wife will have to work in order to sustain the high standard of living in Singapore.
In my next blog entry, I will share with all of you on "How Do We Grow Our Money In Accordance To The Syariah Law", a topic whereby it is a solution to beat against the inflation. Stay tuned! In the meantime, do feel free to email me for feedbacks or suggestions on future topics. Thank you! :)
Inflation affects our savings especially when we have to use our savings to purchase daily necessities which are always increasing in price due to certain factors of inflation such as the rising prices of oil affects our energy consumption such as oil for our car, electricity, etc. High demand of goods and services, the prices of it, also increases.
Take for example the recent haze chaos, whereby there are high demand for face mask and low supply of the face mask causes most businesses to take this advantage by increasing the price of the mask, making it only available to be purchased by people who can really afford the high price of the face mask. Inflation causes an unfair dealing of transaction which is if an advantage for the well-to-do people, and a disadvantage for the lower income people.
Inflation causes our savings to deplete faster than usual, to keep up with the high standard of living. This in turn causes the lower and middle income, difficulty in surviving with just one job of a lower pay. Recent surveys have shown that the standard of living is too high that not only the husband' salary is not enough and therefore the wife have to also go out and work, in order to help the husband to support the family. It is a current trend whereby both husband and wife will have to work in order to sustain the high standard of living in Singapore.
In my next blog entry, I will share with all of you on "How Do We Grow Our Money In Accordance To The Syariah Law", a topic whereby it is a solution to beat against the inflation. Stay tuned! In the meantime, do feel free to email me for feedbacks or suggestions on future topics. Thank you! :)
Wassalam.
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