By James Moore
December 4, 2023
It’s easy to blame rising gas prices and grocery bills on inflation, but many Americans don’t account for how much inflation can eat into their investments and savings as well. Even a small change in the inflation rate can massively deplete your purchasing power over years or decades. (Did you know eggs were just $1.24 per dozen back in 2003?)
Tinker with the calculator below to estimate the effects of inflation on your money over time. Choose between monthly and annual figures, and then provide as much information as you can regarding your expenses to see how much cash it’ll take to maintain your current standard of living up to 20 years in the future.
What You Can Do
Seeing the power of inflation over time can be a shock, but don’t worry — below are a few constructive steps you can take to make sure time is on your side.
- Talk to a financial adviser: Consider using a legal-services provider like Nolo to help find a financial adviser to help you with your financial strategy. Nothing beats building your own financial fluency, but an expert can help you avoid costly mistakes on your journey.
- Create a budget: Maintaining your standard of living over time won’t just happen. Getting a clear picture of where your money is going can set you up to make smarter decisions and expand your financial headroom for saving and investing. Check out our Personal Budget Calculator to gain some clarity, and then look for opportunities to trim the excess.
- Set some milestones: Long-term savings plans begin with short-term goals. Whether you’re cutting out extras in your budget or finding creative ways to trim expenses on the essentials, making small moves now will help set you up for success in the long term. Take some time to consider any immediate goals you’d like to achieve, and use our Savings Goal Calculator to create a plan of action. Small changes like clipping coupons on clothing can be a great start!
- Start early: Time works both ways — inflation can eat away at stagnant cash and investments, but it can also be a powerful force for wealth-building. Find out more about how you can get time on your side with our Early Savings Calculator.