{"id":12005,"date":"2024-01-26T10:00:15","date_gmt":"2024-01-25T21:00:15","guid":{"rendered":"https:\/\/cuaccountants.co.nz\/?p=12005"},"modified":"2024-01-26T09:49:27","modified_gmt":"2024-01-25T20:49:27","slug":"demystifying-inflation","status":"publish","type":"post","link":"https:\/\/cuaccountants.co.nz\/demystifying-inflation\/","title":{"rendered":"Demystifying Inflation"},"content":{"rendered":"

\"board,<\/p>\n

 <\/p>\n

Inflation \u2013 it\u2019s a word that\u2019s been on everyone\u2019s lips recently.\u00a0 Rates are on the rise, and our small business community is feeling it the most.\u00a0 <\/span><\/p>\n

Increased supply costs, a lack of workforce, and dwindling profits are among the challenges faced.\u00a0<\/span><\/p>\n

Let\u2019s demystify inflation and delve into its impact on small businesses.<\/span><\/p>\n

Grasping Inflation<\/strong><\/h3>\n

In essence, inflation is the uptick in the cost of goods and services.\u00a0 Whether it\u2019s a can of beans or a property, prices creep up.\u00a0 This fluctuation is driven by numerous factors including supply and demand, production costs, staff shortages, monetary expansion, and wage increases.<\/span><\/p>\n

While it may seem counterintuitive, a certain degree of inflation is intentional.\u00a0 Economists broadly concur that a 2% annual inflation rate is optimal, striking a balance in the economy while fostering growth.\u00a0 This modest rate enables central banks to decrease interest rates, stimulating the economy without burdening consumers excessively.\u00a0<\/span><\/p>\n

Despite this consensus, the intricate nature of inflation and its implications often spark spirited discussions.\u00a0 Though we can\u2019t control inflation as individuals, understanding its implications for our personal finances is critical.<\/span><\/p>\n

How does inflation affect small businesses?<\/strong><\/h3>\n

Small businesses, with their limited financial buffers, are especially susceptible to inflation. As inflation pushes up the cost of goods and services, small businesses must grapple with these increased expenses with fewer resources at their disposal. Picture this: a small business sells a product for $10. Suddenly, production costs rise to $12 due to inflation. The business is then faced with a tough decision \u2013 absorb this extra cost or pass it onto customers, potentially harming sales.<\/span><\/p>\n

One of the key features of inflation is the erosion of consumers\u2019 buying power.\u00a0 When your savings grow at a slower rate than inflation, you\u2019re effectively losing money.\u00a0 The interest earned on your savings account needs to outpace the inflation rate to preserve its value.\u00a0 With global inflation currently outstripping the average savings account interest rate, you might find your money doesn\u2019t go as far as it once did, even though the dollar amount remains the same.<\/span><\/p>\n

Navigating with the Rule of 72<\/strong><\/h3>\n

To get a rough idea of what this loss of buying power looks like, let\u2019s turn to the Rule of 72<\/strong>.\u00a0 Though it\u2019s a rough estimate and doesn\u2019t account for varying inflation rates over time, it\u2019s a useful tool to envision what might happen to your money if the current rates persist.<\/span><\/p>\n

To estimate how long it\u2019ll take for your savings to double, divide 72 by your annual interest rate.\u00a0 Let\u2019s say you have $100 in a savings account with a 2.5% interest rate.\u00a0 According to the Rule of 72, it\u2019d take about 28.8 years for your savings to reach $200.<\/span><\/p>\n

The Rule can also help you gauge how quickly inflation might eat into your savings.\u00a0 Divide 72 by the annual rate of inflation. If the inflation rate is 6.5%, for example, it\u2019d take just a little over 11 years for your $100 to be worth half its value.<\/span><\/p>\n

This illustrates why an inflation rate exceeding the interest rate earned by your customers can be a challenge.\u00a0 As prices go up, consumers become more hesitant to buy goods and services. If small businesses have to raise prices to cope with inflation, it could further affect consumer purchasing power.\u00a0 Therefore, it\u2019s crucial for small businesses to adjust to inflation to stay afloat.<\/span><\/p>\n

If you\u2019d like to talk about steps you should take in your business, get in touch with us<\/a>.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

  Inflation \u2013 it\u2019s a word that\u2019s been on everyone\u2019s lips recently.\u00a0 Rates are on the rise, and our small business community is feeling it the most.\u00a0 Increased supply costs, a lack of workforce, and dwindling profits are among the challenges faced.\u00a0 Let\u2019s demystify inflation and delve into its impact on small businesses. Grasping Inflation … Continued<\/a><\/p>\n","protected":false},"author":2,"featured_media":12035,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[175,204],"tags":[],"acf":[],"yoast_head":"\nDemystifying Inflation - Chapman Upchurch<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cuaccountants.co.nz\/demystifying-inflation\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Demystifying Inflation - Chapman Upchurch\" \/>\n<meta property=\"og:description\" content=\"  Inflation \u2013 it\u2019s a word that\u2019s been on everyone\u2019s lips recently.\u00a0 Rates are on the rise, and our small business community is feeling it the most.\u00a0 Increased supply costs, a lack of workforce, and dwindling profits are among the challenges faced.\u00a0 Let\u2019s demystify inflation and delve into its impact on small businesses. Grasping Inflation … Continued\" \/>\n<meta property=\"og:url\" content=\"https:\/\/cuaccountants.co.nz\/demystifying-inflation\/\" \/>\n<meta property=\"og:site_name\" content=\"Chapman Upchurch\" \/>\n<meta property=\"article:published_time\" content=\"2024-01-25T21:00:15+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-01-25T20:49:27+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cuaccountants.co.nz\/app\/uploads\/1193333-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"853\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Bizink\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Bizink\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/cuaccountants.co.nz\/demystifying-inflation\/\",\"url\":\"https:\/\/cuaccountants.co.nz\/demystifying-inflation\/\",\"name\":\"Demystifying Inflation - Chapman Upchurch\",\"isPartOf\":{\"@id\":\"https:\/\/cuaccountants.co.nz\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/cuaccountants.co.nz\/demystifying-inflation\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/cuaccountants.co.nz\/demystifying-inflation\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/cuaccountants.co.nz\/app\/uploads\/1193333-1.jpg\",\"datePublished\":\"2024-01-25T21:00:15+00:00\",\"dateModified\":\"2024-01-25T20:49:27+00:00\",\"author\":{\"@id\":\"https:\/\/cuaccountants.co.nz\/#\/schema\/person\/77bdf6b9f15aa38d101858051df1a825\"},\"breadcrumb\":{\"@id\":\"https:\/\/cuaccountants.co.nz\/demystifying-inflation\/#breadcrumb\"},\"inLanguage\":\"en-NZ\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/cuaccountants.co.nz\/demystifying-inflation\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-NZ\",\"@id\":\"https:\/\/cuaccountants.co.nz\/demystifying-inflation\/#primaryimage\",\"url\":\"https:\/\/cuaccountants.co.nz\/app\/uploads\/1193333-1.jpg\",\"contentUrl\":\"https:\/\/cuaccountants.co.nz\/app\/uploads\/1193333-1.jpg\",\"width\":1280,\"height\":853,\"caption\":\"board, blackboard, business\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/cuaccountants.co.nz\/demystifying-inflation\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/cuaccountants.co.nz\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Demystifying Inflation\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/cuaccountants.co.nz\/#website\",\"url\":\"https:\/\/cuaccountants.co.nz\/\",\"name\":\"Chapman Upchurch\",\"description\":\"Accountants in Upper Hutt, NZ\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/cuaccountants.co.nz\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-NZ\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/cuaccountants.co.nz\/#\/schema\/person\/77bdf6b9f15aa38d101858051df1a825\",\"name\":\"Bizink\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-NZ\",\"@id\":\"https:\/\/cuaccountants.co.nz\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/faa045ce72d95971cd78a70031145145?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/faa045ce72d95971cd78a70031145145?s=96&d=mm&r=g\",\"caption\":\"Bizink\"},\"url\":\"https:\/\/cuaccountants.co.nz\/author\/bizinkwpadmin\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Demystifying Inflation - Chapman Upchurch","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/cuaccountants.co.nz\/demystifying-inflation\/","og_locale":"en_US","og_type":"article","og_title":"Demystifying Inflation - Chapman Upchurch","og_description":"  Inflation \u2013 it\u2019s a word that\u2019s been on everyone\u2019s lips recently.\u00a0 Rates are on the rise, and our small business community is feeling it the most.\u00a0 Increased supply costs, a lack of workforce, and dwindling profits are among the challenges faced.\u00a0 Let\u2019s demystify inflation and delve into its impact on small businesses. Grasping Inflation … Continued","og_url":"https:\/\/cuaccountants.co.nz\/demystifying-inflation\/","og_site_name":"Chapman Upchurch","article_published_time":"2024-01-25T21:00:15+00:00","article_modified_time":"2024-01-25T20:49:27+00:00","og_image":[{"width":1280,"height":853,"url":"https:\/\/cuaccountants.co.nz\/app\/uploads\/1193333-1.jpg","type":"image\/jpeg"}],"author":"Bizink","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Bizink","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/cuaccountants.co.nz\/demystifying-inflation\/","url":"https:\/\/cuaccountants.co.nz\/demystifying-inflation\/","name":"Demystifying Inflation - Chapman Upchurch","isPartOf":{"@id":"https:\/\/cuaccountants.co.nz\/#website"},"primaryImageOfPage":{"@id":"https:\/\/cuaccountants.co.nz\/demystifying-inflation\/#primaryimage"},"image":{"@id":"https:\/\/cuaccountants.co.nz\/demystifying-inflation\/#primaryimage"},"thumbnailUrl":"https:\/\/cuaccountants.co.nz\/app\/uploads\/1193333-1.jpg","datePublished":"2024-01-25T21:00:15+00:00","dateModified":"2024-01-25T20:49:27+00:00","author":{"@id":"https:\/\/cuaccountants.co.nz\/#\/schema\/person\/77bdf6b9f15aa38d101858051df1a825"},"breadcrumb":{"@id":"https:\/\/cuaccountants.co.nz\/demystifying-inflation\/#breadcrumb"},"inLanguage":"en-NZ","potentialAction":[{"@type":"ReadAction","target":["https:\/\/cuaccountants.co.nz\/demystifying-inflation\/"]}]},{"@type":"ImageObject","inLanguage":"en-NZ","@id":"https:\/\/cuaccountants.co.nz\/demystifying-inflation\/#primaryimage","url":"https:\/\/cuaccountants.co.nz\/app\/uploads\/1193333-1.jpg","contentUrl":"https:\/\/cuaccountants.co.nz\/app\/uploads\/1193333-1.jpg","width":1280,"height":853,"caption":"board, blackboard, business"},{"@type":"BreadcrumbList","@id":"https:\/\/cuaccountants.co.nz\/demystifying-inflation\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/cuaccountants.co.nz\/"},{"@type":"ListItem","position":2,"name":"Demystifying Inflation"}]},{"@type":"WebSite","@id":"https:\/\/cuaccountants.co.nz\/#website","url":"https:\/\/cuaccountants.co.nz\/","name":"Chapman Upchurch","description":"Accountants in Upper Hutt, NZ","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/cuaccountants.co.nz\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-NZ"},{"@type":"Person","@id":"https:\/\/cuaccountants.co.nz\/#\/schema\/person\/77bdf6b9f15aa38d101858051df1a825","name":"Bizink","image":{"@type":"ImageObject","inLanguage":"en-NZ","@id":"https:\/\/cuaccountants.co.nz\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/faa045ce72d95971cd78a70031145145?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/faa045ce72d95971cd78a70031145145?s=96&d=mm&r=g","caption":"Bizink"},"url":"https:\/\/cuaccountants.co.nz\/author\/bizinkwpadmin\/"}]}},"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/cuaccountants.co.nz\/app\/uploads\/1193333-1.jpg","_links":{"self":[{"href":"https:\/\/cuaccountants.co.nz\/wp-json\/wp\/v2\/posts\/12005"}],"collection":[{"href":"https:\/\/cuaccountants.co.nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cuaccountants.co.nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cuaccountants.co.nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/cuaccountants.co.nz\/wp-json\/wp\/v2\/comments?post=12005"}],"version-history":[{"count":4,"href":"https:\/\/cuaccountants.co.nz\/wp-json\/wp\/v2\/posts\/12005\/revisions"}],"predecessor-version":[{"id":12037,"href":"https:\/\/cuaccountants.co.nz\/wp-json\/wp\/v2\/posts\/12005\/revisions\/12037"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cuaccountants.co.nz\/wp-json\/wp\/v2\/media\/12035"}],"wp:attachment":[{"href":"https:\/\/cuaccountants.co.nz\/wp-json\/wp\/v2\/media?parent=12005"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cuaccountants.co.nz\/wp-json\/wp\/v2\/categories?post=12005"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cuaccountants.co.nz\/wp-json\/wp\/v2\/tags?post=12005"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}