1. Your personal inflation rate is probably lower than you think

Right now, the official inflation rate in Germany is 7.6% (as of June 2022). That means €50 euros is no longer worth exactly €50 — in real terms it’s only worth €46.20 (which is 7.6% less).

However, your personal inflation rate could be much lower than this. That's because the inflation rate is calculated according to how much the average German household spends on things like food, petrol, clothing, and electricity.

So, if you don't have a car, or your electricity and gas contracts have a price guarantee, then your personal inflation rate is likely far below 7.6%. You can actually calculate it using this easy-peasy personal inflation calculator — and if your personal inflation is low, then that’s awesome! If it's high, then right now is a good time to start thinking about where you can save some money.

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2. Is it better to save every cent, or spend it all?

The community asks:

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When inflation goes up, our money generally falls in value. However, there are areas where prices don't rise much. For example, in June 2022, the price of sneakers went down (yay!). To find out which things are going up or down in price, check out the price monitor.

It’s probably not a wise decision to spend all your cash right now, as it’s possible that energy prices will rise even further. If that happens then it’ll be important to have some savings to help you out. Even if you have low energy bills at home, you’ll still notice the increased price of energy reflected in the prices of whatever you buy. That’s because when energy becomes expensive, then everything becomes expensive — from food, to hotels, or driving a car: everything needs energy!

If you don't have a lot of savings, then you don't have to worry about losing a lot of money due to inflation.

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3. Inflation is higher elsewhere

The inflation rate in Turkey is 78%! The cost of everyday living has risen sharply — and Turkey was in an economic crisis even before Covid and the war in Ukraine.

But there are also large countries with low inflation rates. Saudi Arabia is one such example —  it’s a country that exports oil and gas and is therefore benefitting from the current rise in prices.

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4. Inflation will continue to rise

Experts believe that inflation rates will continue to rise, and that they haven’t yet reached the peak. On top of that, once inflation does fall, prices are unlikely to return to their previous levels.

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🔥 What does this mean for you?

• Your money is still safe — it's not going to lose all its value overnight. However, most of us will feel the pinch in the coming months.
• Use the personal inflation calculator to figure out where you can make some savings.
• Get into the habit of saving, as then you’ll have a little safety net if/when prices rise.
• Compare your personal inflation rate with your friends — you're guaranteed to score points for dropping some of these useful facts.

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