What’s the point of saving when real inflation rate* is higher than the interest banks apply to saving accounts? Or even average investment account interest rates? Saving now only makes sense in short term, for things you know you’re going to need and can save up for in less than a year—home appliances, phones, laptops, small home improvements etc—and even then leasing or credit card may make more sense if prices continue to rise.
And that is assuming you have money left over after paying for necessities in the first place… It’s not as if you can pay for eg renovation of your bathroom after a year of being able to set aside just 30 or 50€, even if you don’t have an emergency expense taking you back to square 1.
Use it or lose it.
What’s the point of saving when real inflation rate* is higher than the interest banks apply to saving accounts? Or even average investment account interest rates? Saving now only makes sense in short term, for things you know you’re going to need and can save up for in less than a year—home appliances, phones, laptops, small home improvements etc—and even then leasing or credit card may make more sense if prices continue to rise.
And that is assuming you have money left over after paying for necessities in the first place… It’s not as if you can pay for eg renovation of your bathroom after a year of being able to set aside just 30 or 50€, even if you don’t have an emergency expense taking you back to square 1.
*This essay is from 2021 but things haven’t got better since:
https://evonomics.com/the-truth-about-inflation-why-milton-friedman-was-wrong-again/