Inflation Calculator: Impact of Inflation on Savings

In 2009, a movie ticket cost $7.50 on average. By 2019, it was $9.16. That's the effect of inflation. The price of a movie ticket, a house, or a semester in college tends to rise over time, sometimes quickly and at other times slowly—and that can impact your personal savings plan, too. Let's say you have $100 in a savings account that pays a 1 percent interest rate. After a year, you will have $101 in your account. But if the rate of inflation is running at 2 percent, you would need $102 to have the same buying power you started with. You've gained a dollar but lost buying power. Any time your savings don't grow at the rate of inflation you will effectively lose money.