Benjamin Franklin once famously said that there is nothing certain in this life, except death and taxes. However, he may have forgotten to add inflation to the list.
What is inflation? Simply put, when inflation occurs, the domestic currency is losing value. For example, in the USA in the 1960s, a bar of chocolate cost $0.10, but now costs $1. This is another way of saying that before, you could get ten chocolate bars with $1, but now, you can only buy one chocolate bar with a $1.
Because of this, inflation is a real risk, as it can make our money shrink before our eyes. Even if we’re earning a good salary and have put some of that money away in savings, we need to make sure that our money is keeping up with the inflation rate and not losing its purchasing power.
The good news is you can protect yourself against inflation. Here are two of the ways you can do that below: