The cost of living is rising at an unprecedented rate thanks to inflation.
The Federal Reserve aims to keep the inflation rate in the US at 2% a year. However, inflation is now at a 30-year high and rose up to 5.4% yearly pace in September.
When inflation is at 5.4%, it means average Americans’ spending will increase by $216 per month, which adds up to a $2,592 increase per year.
Here’s the math: The average cost of living in the US is just over $4,000 a month, depending on the state you live in. If the price of your basket of goods and services was $4,000 a year ago, it will now cost you $4,216 today for that same basket thanks to the 5.4% increase from inflation. Over a year, this adds up to $2,592.
Nobody is immune to inflation.
The website Market Wise states: “Broad shortages of labor and supplies are raising costs for companies and they are charging customers higher prices to maintain their profits. These shortages, in some cases, have gotten worse and there’s little end in sight.”
The prices of necessities such as food, utilities, and gasoline are currently volatile.
With the cost of living rising, what can you do to protect your wealth without sacrificing your lifestyle?
There is one simple answer to ease inflation’s effects on your wealth and protect your standard of living.
Switch your spending to your Save Debit Invest card.
If you are already spending on average $4,216 a month using your Save Debit Invest card on qualifying transactions, $4,216 will be matched and invested into a diversified portfolio by Save on your behalf. Every* $1 you spend, Save invests $1 on your behalf for the next 12 months.
If you choose Save’s moderate investment profile and achieve the average annual return of 2.98%, after 12 months, your $4,216 spend will generate you a return of $125.**
While the average annual return for Save’s Moderate investment strategy is 2.98%, the actual monthly return achieved will fluctuate in line with the performance of your chosen investment strategy, so what you make could be higher or lower than this percentage.
Even though the average return is 2.98% for Save’s moderate investment strategy, this return would not entirely cover inflation at 5.4%. Nonetheless, it does help ease the financial burden inflation can cause.
By using your Save Debit Invest card you are giving yourself a chance of making market-linked returns that could help reduce the impacts of inflation on your lifestyle.
Additionally, most debit cards don’t offer any cashback, and those that do usually have a spending cap, the Save Debit Invest card can help maximize your earning potential.
*Save matches signature debits, which include most transactions in which you sign for your purchase and purchases made online and through contactless spending. The payment transaction type (signature-based or other) is ultimately decided by the merchant and how the transaction is transmitted to Save at the time of processing. We reserve the right to determine if a transaction is considered qualified spending. For more detailed information, please see our FAQ on signature spending.
**Average annual returns are based on hypothetical back-tested performance in the Save Moderate Portfolio from 2006 to present. Hypothetical back-tested performance is no guarantee of future performance and actual results will vary. Returns are subject to change daily. The minimum return will always be at least 0%. The return figures shown are for informational purposes only and are not actual customer returns. For more detailed information please see Hypothetical Back-testing. For more detailed information, please see our Hypothetical Back-testing.