Inflation below 2%: Why isn't your purchasing power taking off?

An apparent improvement 💬 Central banks have achieved their price stability target: inflation below 2%

An apparent improvement 💬

Central banks have achieved their price stability target: inflation below 2%. Yet, many households are not experiencing any improvement in their daily lives. Why this discrepancy between economic statistics and the reality on the money table?

Understanding inflation: What the numbers don't show 🔍

Lower inflation doesn't mean prices are falling, but rather that they're rising more slowly. Prices are still climbing, just at a more moderate pace. Furthermore, a return to controlled inflation isn't enough to erase the increases accumulated over several years.

Since 2019, prices have risen by up to 18% in some sectors. In other words, even with inflation under control today, the cost of living remains significantly higher than before the crisis. It is this cumulative effect that continues to weigh on your purchasing power.

Readjusting your budget for back to school 🎒

The start of the academic year is an ideal time to review your budget. Here are some practical tips to help you get back on track.

Prioritize essential expenses 🧾

Start by identifying the essential expenses: school fees, supplies, transportation, insurance. For a family with two children, these costs can average €520. By creating a detailed list, you'll avoid oversights and unpleasant surprises.

Control your accessory spending 🎭

Leisure activities have their place, but within a defined budget. Analyze your secondary expenses (sports, classes, shopping, etc.) and set a realistic limit not to exceed.

Adopt a recycling mindset 🔄

There's no need to buy everything new every year. Supplies, clothing, equipment: many purchases can be avoided by making the most of what you already own.

Reallocate some expenses 💡

A daily takeaway coffee or multiple outings with friends may seem insignificant, but they easily add up to €150 per month. Reducing these types of expenses allows you to fund your leisure activities or a stress-free weekend.

Balance your desires and your savings 💼

Keep a budget dedicated to going out while maintaining a savings routine. Better yet, start investing: even small amounts can generate long-term returns and strengthen your financial flexibility.

Nvidia: Spectacular growth, underlying concern 🧠

Impressive performance 🚀

In the financial markets, Nvidia once again attracted attention with economic results far exceeding expectations. Its role in the rise of artificial intelligence allowed it to capture explosive growth and a record valuation.

High expectations… perhaps too high 📊

Despite these dazzling figures, investors are worried. Why? Because sustaining such growth over time is becoming increasingly difficult. As expectations rise, the slightest disappointment can trigger a sharp market reaction.

Towards an artificial intelligence bubble? 🤖

Some analysts fear a market reversal if the momentum around AI slows. Nvidia's case exemplifies this dilemma: solid fundamentals but a valuation that could be too high. A sharp correction in this sector would have cascading effects on other technology stocks.

Conclusion: Between budgetary vigilance and market caution 🧭

Even with inflation under control, purchasing power remains weakened by past price increases. Managing your budget remains your best ally. On the investment front, the spectacular performance of certain companies like Nvidia should be analyzed with caution.

In times of economic uncertainty, it is essential to adopt a balanced approach: manage your personal finances rigorously and invest wisely.

At Evvest, we help you structure your budget and investments, taking into account economic cycles and your life goals. To find out how to optimize your situation, simulate your needs now.

Simulate your needs here.