Rising prices are a part of life and with the Save® Debit Invest card, maintaining your money’s purchasing power can be, too.
It looks like the US economy is on the road to recovery. A healthy economy is a good sign, but what does this mean?
One word: inflation.
Since the economy reopened, consumers haven’t shied away from spending.
Demand for goods and services went up, but supply couldn’t quite keep up, which was one of the reasons why the price of just about everything rose. In fact, inflation, as measured by the CPI, rose 6.2% year-over-year this October.
While such a strong rise in prices is scary, experts predict it will level out. The International Monetary Fund projects roughly a 2.25% annual rise in prices until 2026. This projection means that an item you buy today for $100 will cost $102.25 next year and increase a couple of dollars each year thereafter. The chart below from Statista shows International Monetary Fund’s predicted annual inflation in the U.S. from 2010 to 2020 with additional projections up to 2026.
Find more statistics at Statista
Moderate inflation of around 2% is considered normal and healthy for an economy. Even so, it hurts your purchasing power. As a small example of inflation in action, the cost of a movie ticket keeps increasing year after year. In 2012, a ticket to see The Avengers cost $7.96. As of 2019, the cost had gone up to $9.16. And in 2021, an AMC ticket locally costs $12.85.
When inflation rises, your money is losing its purchasing power. And since inflation is expected to continue going up over the next few years, how will your money keep up?
To maintain your purchasing power, you can potentially:
- Get a yearly salary increase
- Work more hours
- Put your money in a savings account
- Maybe try your luck with crypto?
- Become an investor by using Save
Our choice? Become an investor by using Save.
With Save, you don’t need to be an expert or have tons of disposable income to invest.
Save matches every qualified dollar you spend and invests it in the markets for you, with an average annual return of 2.96%** after fees. An experienced portfolio manager looks after your investments, ensuring they are diversified.
If the experts are right and average annual inflation hovers around 2.25% in the next few years, the returns from Save’s investment matching have the potential to keep up with inflation.
Take the price of gas for example.
If it costs you an average of $1,500 to fill up your tank this year, a 2.25% inflation will hike up that price to $1,533 next year. Using your Debit Invest card at the pump could ensure Save matches your $1,500 in gas and invests it. Assuming an annual rate of return of 2.96%**, net of fees, you could earn a $40.00 cash reward from your initial purchase, which could help offset the cost of the next year’s gas purchases and give you an edge against rising prices.
*For each qualified spend using the Save Debit Invest card, Save buys a strategy-linked security whose investment value is equivalent to the dollar spent.
**Average annual returns are based on hypothetical back-tested performance in the Save Moderate Portfolio Strategy 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. Minimum return will always be at least 0%. All return figures shown are for informational purposes only and are not actual customer returns. The funding rates and specific calculations for the Premium and Core bundle returns are described in detail in the Hypothetical Back-test. For more detailed information please see Hypothetical Back-testing.