← Money & AI: all topics, calculators & checks
Inflation explained simply
Inflation means your money becomes worth less over time — you can buy less with it tomorrow than today. It sounds abstract but has very concrete effects on your savings. Here, without jargon, what it means in practice. No prior knowledge needed.
What is inflation?
When prices generally rise, the purchasing power of your money falls: for the same amount you get less later. If, say, everything rises 3% a year, a purchase that costs €100 today costs about €103 next year — and your €100 note buys correspondingly less. Over many years this adds up significantly.
What it means for you
Cash & savings lose in real terms
If your money earns interest below inflation, it loses real value — even if the number in the account stays the same.
Long-term money needs a plan
Broadly diversified and long-term, money can offset inflation better (no guarantee). More: ETFs for beginners & savings plan.
The emergency fund stays safe anyway
Even with inflation, the buffer belongs in a safe account — availability beats yield here. Build an emergency fund.
The honest rules
1. No panic, no hype
"Protect your money from inflation" ads often lead to expensive products. Calm and a plan beat frantic action.
2. Don't park everything in cash
The emergency fund, yes — but keeping your entire long-term wealth in a savings account for decades loses real value.
3. Invest broadly & long-term
Against slow loss of purchasing power, long-term broad investing helps most — no guarantee, with ups and downs.
4. Adjust fees & prices
As a self-employed person: if your costs rise, your prices must rise too. Hourly-rate calculator.
Purchasing-power calculator
What will your money really be worth in a few years? Runs in your browser, nothing is stored.
Simplified calculation with constant inflation (purchasing-power adjusted, no interest/investment). Real inflation varies. Not investment advice.
Understand money, stay calm
aban news makes sense of money & AI — honest, with no fear marketing. In 5 minutes a day. (The daily newsletter is in German.)
Founding member (€69 once, lifetime) or try premium free — ad-free, full archive, a direct line.
See premium — €69 lifetime → Try it free first →One AI tip a day, in 5 minutes
Honest, anti-hype, free. Mon–Fri, unsubscribe anytime.
Common questions
What is inflation, simply put?
Inflation means prices rise, so your money becomes worth less over time. For the same amount you get less later than today. That's called a loss of purchasing power.
What does inflation mean for my savings?
Money in a checking or savings account loses real value during inflation if interest is below inflation. The emergency fund still belongs in a safe account; long-term money, broadly invested, can offset inflation better — with no guarantee.
How do I protect myself from inflation?
No magic formula and no panic: secure an emergency fund, don't keep all long-term money in cash, invest broadly and long-term, and adjust prices/fees regularly. This is not investment advice.
Related: Emergency fund · Savings plan · ETFs for beginners · Money & AI
aban news is a Swiss sole proprietorship and gives no financial, investment or tax advice. All content is for general information.