Inflation and its impact on finance.

Everybody is so hit by this inflation that it has caused a lot of people to have problems with their finances. I am also affected by it and sometimes, I would feel sad, but at some point, I shake myself off knowing there is nothing to do about it unless the government decides to take everything back to normal. Prices of goods keep increasing when the dollar price has gone down. I heard someone say that we are our problems, especially in my country. We all expected the price of items should start going down knowing how the dollar has gone down too but no, we are just so greedy. That's the nature of humans.

This inflation has affected my finances, even when I have tried my best to cut down on my expenses, keep to my low budget, be a minimalist and live below my means, it still seems I am not trying my best enough and that's because of how hard the inflation is. I wonder how the poor survive this economy.

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I was very happy at the beginning of the year as I thought my Hive account wouldn't be touched much since I am getting allowances from both the state and federal government as a Nigerian youth corper. I never wanted to keep withdrawing and adding pressure on my account but to grow it while smiling as I see progress in my wallet. Even the allowances aren't enough especially having two siblings in the University who keep asking for money. Every week, we try to send both of them $30 for their transport fare alone. Imagine! This isn't their fault but the economy isn't smiling with inflation and this is telling on my savings and finance in general.

I was pushed to vent my anger on the economy earlier today and wished things could go back to normal but had to calm down so it doesn't affect my day and the bright week I am looking ahead to. Right now, I am thinking of how to raise more money for them to sort themselves with food and transport which I know won't stop coming. Everyone is tired because of how hard it is affecting our finances. Even our savings aren't safe anymore but still, we have to keep doing that while preparing ourselves for a better future.

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Inflation has a great impact on our finances and one of them is the decrease in purchasing power. As the price keeps rising, the same amount of money is used to buy fewer goods and services. The amount of money with which you used to get a large quantity of goods when prices were low cannot be the same with inflation today. The higher the price, the lower the quantity of goods purchased.

Prices keep skyrocketing but salaries aren't being increased. Just take a look at an individual who is on a fixed income or stagnant wages, this will surely affect his or her standard of living as he or she struggles to afford the same level of goods and services. One of my friends keeps lamenting how things are hard for her especially as she has a lower salary per month, that is what makes people go into illegal businesses just to survive and beat the inflation.

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Another impact is the erosion of savings. I have an app where I save money which I get from the federal government and earn interest of 12% per annum on it. Just recently, I received an email that the percentage has been reduced which has caused a decrease in the interest I get daily on it. This is another impact inflation has on savings. This can be detrimental to those saving for long-term goals unless the issue of inflation is resolved.

Let's talk about the psychological effect it would have on individuals. The first is making individuals go into impulsive spending. They may feel that their money is losing value, so they rush to spend it thinking the value might keep depreciating. This act surely can lead to irresponsible financial decisions such as taking unnecessary loans and buying items they do not actually need which leads to going into debt.

It can also make long-term planning feel more challenging for an individual. Being uncertain about future prices and the economic conditions can make them find it hard to achieve their financial goals thinking inflation might erode the value of what they have invested or saved.

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Lastly is the financial anxiety it causes on individuals. They get worried about their ability to afford necessities or maintain their standard of living with how prices of goods keep going up. This anxiety can affect their overall well-being and quality of life impacting their mental health.

In conclusion, inflation exerts great influence on personal finances affecting the above-mentioned challenges, but by understanding the implications of inflation and implementing the necessary financial strategies, individuals can protect their financial planning in the best way while achieving long-term prosperity despite the inflationary challenges.

Images created by me on Bing AI

This is my participation for Day 25 of the March Inleo Prompt. You can click the link to participate too.