How do inflation and interest rate changes actually impact the average person's ability to build wealth, especially in low-to-middle income households? It feels like saving becomes harder when inflation is high, but borrowing gets more expensive when rates go up — so what's the smart financial move during times like this? Is there ever a 'good' time to save, invest, or take on debt when the economy feels unstable?
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When inflation goes up, the prices of things like food, gas, and rent also go up, which means people have less money left to save. At the same time, when interest rates rise, it costs more to borrow money for things like loans or credit cards. This can make it feel like there’s no good option—saving is harder, and borrowing is more expensive. For people with lower or middle incomes, it’s best to be careful with spending, try to avoid new debt if possible, and still save a little when they can, even if it’s just a small amount. The economy might feel unstable, but building small, steady habits can help over time. Hope this clears things up :)