Inflation
Also known as: price increase, currency devaluation, purchasing power loss
Most people only became truly aware of inflation through the interest rate hikes following COVID. Before that, the topic barely existed — prices rose slowly, nobody noticed. Since then, we all feel the rising costs. Some more, some less, but it has become real. That is exactly why it is important to engage with investments — whether an ETF savings plan or something else. Because money just sitting in your account loses value every year.
How much inflation is normal?
The European Central Bank targets 2% per year. At 2% inflation, your money's purchasing power halves in about 35 years. At 5% (like 2022/2023 in Europe), that takes only 14 years. That's why keeping money in a savings account is not a good long-term strategy.
How do you protect yourself?
Three levers: 1) Investing — stocks and ETFs have historically beaten inflation (7–8% return vs. 2–3% inflation). 2) Salary negotiation — your salary should at least keep up with inflation. 3) Review fixed costs — regularly compare contracts (electricity, insurance, phone).
BudgetHeld says
In the BudgetHeld hourly wage calculator, you see what your working time is really worth — a good starting point for salary negotiations. And in the budget itself: if your income stagnates but expenses rise, the fixed cost ratio shows you the problem.
Related tools
Hourly Wage Calculator →Related Terms
Written by David El Dib — Financial expert & founder of MoneyTalk