5 Savings Mistakes to Avoid During Times of Inflation

$20 bills in a wallet, in a file photo. Justin Sullivan/Getty Images

Inflation has an impact on your money over time, including what you can buy with the dollars you have. Given this, it can be worrisome if high inflation looms on the horizon. Should you stop saving if your funds won’t have as much purchasing power later? Or should you save more than before?

As you consider your own approach, steer clear of these common savings errors. Doing so could help you ride through the ups and downs of interest rates and still sleep well at night.

Mistake No. 1: Parking All Funds in a Savings Account

If you regularly put money into a savings account, it’s important to pay attention to the rate of return your funds receive. “Although banks give interest to your savings, they’re so low that you won’t be able to catch up with high inflation,” says Paul Sundin, a CPA and CEO of Emparion, a retirement services provider. “In a few years, your savings won’t have the same value they have now.”