Inflation is the steady rise in prices that makes each shilling buy less than it did last year. It matters for families because money left idle quietly loses purchasing power even while the number on the account stays...
Inflation is the steady rise in prices that makes each shilling buy less than it did last year. It matters for families because money left idle quietly loses purchasing power even while the number on the account stays the same. Protecting savings therefore means earning a return that at least keeps pace with rising prices, not merely keeping the money safe from theft.
East African families already know inflation in their bones, which is why the region's most sacred financial belief exists. The Myth That Land Never Loses Value states it plainly: a family that kept its savings in shillings through the currency's bad decades was robbed slowly and legally, while a family that kept its savings in land was not. That memory is earned, and it explains why generations concluded that the answer to inflation is to hold something the central bank cannot print.
The modern version of the same defense is the yield-bearing instrument. Unit Trusts for Family Money closes on exactly this point: a family that leaves its emergency floor in an account earning two percent lets inflation collect the difference every year, while licensed money market funds were paying roughly 11 to 12 percent in mid-2025, reachable within days. And What Is Compound Interest? adds the long-horizon corollary: inflation eating part of the real value is an argument for yield-bearing instruments over the mattress, never an argument for not starting.
The costly error is believing cash is safe because the number never falls. Cash is safe in nominal terms and guaranteed to lose in real terms; the account statement simply never shows the loss, so nobody grieves it. The opposite error is overcorrecting: fleeing entirely into land because land resists inflation, and discovering that the cure has side effects the disease never had. The land myth article documents them: sales measured in months, distress discounts of twenty or thirty percent, court queues that freeze value for years. A family fully in cash is robbed slowly; a family fully in land cannot pay Tuesday's bill. The answer to inflation is never one asset. It is a floor that earns while staying reachable, and long-horizon assets above it.
This week, find out what your family's idle money actually earns. Check the interest rate on the account where the emergency floor and the school fees money sit. If the answer is near zero, move that layer to a licensed money market unit trust, confirming the manager on the Capital Markets Authority's licensed list and confirming in writing that the money enters the money market fund. Then record the rate in your LegacyPot pots, so the family can see whether its stored money is outrunning prices or quietly losing to them.