Leaving everything in cash under inflation
The mistake
When there is inflation, money left sitting still slowly loses what it can buy. It feels safe because the number in the account never falls — but the basket of goods that number can buy keeps shrinking.
How to recognise it in yourself
- You know the balance of your savings account to the peso, but not what rate it pays.
- Money you have not touched in two years is sitting in the same account as your monthly spending.
- You have thought "I will invest it when I have more" more than once, for more than a year.
What it costs if you leave it
This mistake never announces itself, because the account balance only ever goes up. Consider a sum left in an account paying close to nothing while inflation runs at 6% a year: after five years it buys roughly a quarter less than it did, and after ten years around 45% less. Nothing was lost on any statement. The comparison that matters is not "did the number fall" but "does this still buy what it used to".
The fix
You do not need to take a big risk to fix this. Moving idle savings into a government bond or a liquidity fund that at least tracks interest rates closes most of the gap, with the same or nearly the same safety as cash.
A concrete example
A sum that buys a full cart of groceries today buys visibly less of that same cart a year later once meaningful inflation compounds — while a government-bond position earning a rate closer to that inflation rate keeps pace far better, for a similar level of safety.