High inflation hits people with low incomes particularly hard because their ability to save is limited. Priority lists and changes in perspective are advisable in order to specifically slow down inflation.
The most important thing in brief:
- High inflation always affects people individually, depending on their living situation and income.
- Those seeking help should plan for compromises in advance.
- Priority lists for all areas of life can make planning easier.
High inflation has social consequences
Inflation in Germany has risen rapidly since summer 2022. In June it was 6.4 percent, more than three times as high as the 2 percent rate that economists describe as the ideal value for keeping an economy running sustainably and solidly. Consumers feel the consequences of the loss of purchasing power in many areas of everyday life: when shopping, in social areas, and in their own (financial) provision. People with low incomes are particularly affected by high inflation, as food, rent and energy in particular have become more expensive – and with them the things of everyday life. The consequence: More and more people are reaching their (financial) limits or have to exceed them.
Recognize savings opportunities: rethink instead of sugarcoating
There is no shortage of good advice on how to slow down inflation even with a small budget. The classics include tips such as writing shopping lists, targeted shopping to avoid food waste, comparing prices, buying alternative products, changing shopping behavior and even avoiding consumption. And second-hand, exchange and leasing offers can also save resources.
All of this advice can help consumers save money. In fact, they are often already aware of them and use them whenever possible, as the experts at consumer advice centers note: People buy cheaper and avoid spontaneous purchases. Many also make further compromises when it comes to leisure events, restaurant visits, home accessories and entertainment media. And savings are also being made in the mobility sector: Instead of using the car, some people with the Deutschland Ticket switch to local public transport and use bicycles or other (e) vehicles as an alternative.
All of this shows that many consumers are already taking the offensive. But it is also a fact that in reality this is not always easy to implement for many people. Because sometimes there are hardly any opportunities for savings because only the most necessary and cheapest things are bought and extras were not included beforehand. Those affected by this cannot maintain their own standard of living. This is more about planning for compromises and focusing on doing without the 'least loss'.
Create priority lists – including when it comes to finances and pensions
It is advisable to prioritize expenses in order to find the adjustment screws that make the most sense. It can be helpful to create lists of expenses for different areas of life and to check what is really necessary and where it might be possible to go without for a while. This applies not only to consumer behavior and spending in everyday life, but also to the area of long-term financial investments and (retirement) provision. Here, consumers should carefully explore and think through their options in order to find the best solution. While it is easily possible to temporarily suspend a fund savings plan and stop saving, or to pause payments into a building savings contract, terminating private liability or household contents insurance can result in the loss of insurance cover.
Some consumers will have to specifically adapt their shopping and consumption behavior to their financial possibilities as long as inflation still prevails. Nobody needs to be ashamed of this, after all, most people need to rethink their spending. Anyone who needs advice and support can contact the consumer advice centers, which are available in all 16 federal states. These also offer, among other things, tips on the topic of investing in times of inflation.
