Purchasing Power Simulator
0 $
0 $ of purchasing power lost
0 $ saved
With an initial savings of 0 $, and by saving 0 $ monthly, over 0 years with an average inflation rate of 0%, you will end up with a purchasing power of 0 $.
Inflation affects all of us—even when we don't notice it.
It shows up as a steady rise in the price of everyday goods and services.
But it’s not just about prices going up. When central banks print more money, they pump cash into the economy, which increases demand... and drives prices even higher.
Together, these effects cause a slow but steady drop in your purchasing power.
In other words: the money you save today will buy you less tomorrow.
So how do you track something you can’t see? And more importantly—how do you protect yourself from it?
Inflation is a sustained and widespread increase in prices. It is generally measured through the Consumer Price Index (CPI), which tracks changes in the cost of a representative basket of goods and services reflecting the average household consumption. When inflation rises, every euro you own buys fewer goods and services than before. In other words, your purchasing power decreases. For example, if inflation is 2% per year, an item that costs €100 today will cost €102 next year. If your income doesn't increase at the same pace, you’ll lose purchasing power.
By increasing the cost of living, inflation directly eats away at your savings.
If you place your money in a savings account with an interest rate lower than the inflation rate, the real value of your savings decreases over time.
For example, in 2022, with an inflation rate of 5.2% and an interest rate of 2% on your savings account, your money lost 3.2% of its value over the year.
That’s why it’s essential to factor inflation into your financial decisions, whether it’s for saving, investing, or retirement planning.
In France, the LEP (Livret d'Épargne Populaire) is the only savings account that fully protects against inflation.
The Livret A, on the other hand, is only partially indexed to it (it’s averaged with interbank rates).
Take the example of an economic crisis like the one triggered by the COVID-19 pandemic. To restart the economy, central banks turned to money printing, injecting billions of euros or dollars into the financial system. This injection of liquidity stimulated demand but also contributed to rising prices in several sectors, including:
In this context, inflation is the result of both money printing (which boosted demand) and rising prices (caused by shortages and economic disruptions).
Amount saved: 1000$
Savings product: Livret A
Annual inflation rate: 2% (approximate rate)
Duration: 10 years
Purchasing power: 1000 / (1 + 0.02)10 ≈ 820$