The Inflation Conundrum: Balancing Positives and Negatives in Personal Finance
Finances are something that everyone is concerned about quite a lot
,and it is a big issue that the authorities of the countries are also very much interested in because it is one of the key factors about how a country will be running and everything will be managed accordingly because of which it gets a lot of focus not only from the different parts of the authority but also the people who are involved in it as well as the citizens of the country and their level are also very concerned about their finances.
There are a lot of smaller factors that are involved in the big aspect of the financial system that we are living in and all of them equally play a very different role having an enormous amount of importance of well but the thing that has a bit of a very big impact or can be one of those things which can be influencing decisions based on itself is going to be inflation. VMC in that the prices of commodities as well as for any service is something which keeps on changing and on an annual basis or at a particular frequency if those things keep on changing and increasing to be precise it is something which is inflation.
Inflation is something that has both aspects attached to it as it is having both sides of the coin about its positive and negative impact because it has a lot of things that create a bit of a positive impact and at the same time there are quite of you downside attached to it as well which makes it something that needs to be precisely handled and also be made sure that there is going to be a stability in the way it functions and operates as well as the way it is kept and for that particular purpose there are a lot of people who are involved in the same aspect and to keep in that way in the authorities.
At every single level, it is the personal level or add a country level, or even at a business level at every single one of those and much more other as wherever the financial aspect is involved inflation does play a very big role and also has quite a bit of an impact on that particular aspect as well and on its own it is something that needs to be taken care of white a lot and may have a lot of consequences based on whatever factors that involved and the circumstances it has behind its context.
If we break down the impact of inflation at a personal level then we can do it into passion which is going to be discussing the positive as well as the negative impacts that it has at a personal level and the things that it impacts in such a way which is making decisions from it as well as the things that a different too.
What are the POSITIVES ?
Value Appreciation
Inflation can cause the value of any commodity or asset to increase and that is going to have results as which may be a capital gain for the people who were invested in that particular asset for example real estate can be a big example in this particular aspect as it is acid in which investors can invest their funds and as a result of inflation they can have a capital gain on that.
Wage Increment
Inflation can cause employers to increase the wages for the employees as the increase in living standard the cost of living and everything that is involved does increase which means that the wages are also supposed to be increased to match that level which can be beneficial for the people who are involved in it as a result of wage increased.
Debt Decreases
Inflation can also cause the value of any debt to decrease significantly which is going to be the real value of the Dead that was taken for the borrower as they now need to be reaping their loans with the same currency that is worth more than what the that was taken at which is why they need to be paying less amount of funds which may be very beneficial for the borders as they are now repaying the loan with the same currency that is what the less.
What are the NEGATIVES ?
Purchasing Power Deterioration
With the increase in inflation the standard of living and the cost of every aspect of our life does increase and to keep up with that we need to make sure that we are also increasing the amount of money we used to be making must also increase at the same rate and their for wearable to be maintaining the standard of living that we had which at the end is going to be making sure that we are losing the purchasing power that we had previously because with the same amount of money that we could buy a lot of things previously is not going to be the same case.
Uncertainties in decision-making
Keeping inflation in mind there are a lot of decisions that get impacted a lot because we do think of investment opportunities as something for capital gains and inflation plays a big role if that is a big aspect then we need to be thinking quite a lot as it becomes very difficult to be predicting the future, as well as the expenses that are going to be caused because of that particular aspect as well as the investment returns, are going to be also be impacted quite a bit which is always very difficult to predict accurately.
Thinking about inflation is something that every citizen does quite a lot as it has a very big influence on everything that we do because every aspect of her life is involved in some or the other way with financial decisions and inflation plays a key role in the decision making which is why it has a big and back at all levels let it be the personal level at the business level or even the government decisions that are being made are also be impacted by the same as it.
It is the central bank of the countries who responsible for maintaining an inflation rate that is within a certain range and is also very stable for the economy to have economic growth at the end of the year which is why planning future investment by the government as well as making decisions are based on that particular inflation rate which we are seeing as it is going to have a big impact on the economic health of a country and to maintain that particular inflation rate that is in the target range there are a lot of decisions that are been made by the central banks as well as the government itself to manage inflation and stabilize the particular economy.
Find me on :
| 3Speak | InLeo | DTube |
|---|
Cheers!
Sayu
Posted Using InLeo Alpha