YOU get paid and already know where most of the money is going: bills, groceries, gas, and transportation. Maybe a little something for yourself. And if you’re lucky, something gets left over to save.

But lately, even that little bit seems harder to hold on to. One expense goes up, then another. Hurricane Melissa was followed by higher oil prices and increased transportation costs, while drought and other weather conditions are now putting pressure on food prices. So if it feels like the money barely lands in your hand before it is gone, there may be more to the story than poor budgeting.

Jamaica’s inflation rate reached 7.9 per cent in August, up from 7.5 per cent in July and 6.7 per cent in June, with higher food prices driving the increase, according to the Bank of Jamaica (BOJ). In its August 2026 Quarterly Monetary Policy Report, the central bank reported that savings deposits grew 12.8 per cent over the 12 months to June 2026, down from 15.2 per cent in March. But the BOJ also warned that higher expected inflation could eat into those savings.

“…[D]eposits may reflect income from the expected rebound in economic activity, partly offset by an erosion of savings due to higher expected inflation influenced by global political tensions,” the BOJ said.

ROBINSON…Those things are not in our hands, we have no control over them, and the risks over the next eight quarters are skewed to the upside. (Photo: Joseph Wellington)

So while you may be putting more money aside, you may still be falling behind if the things you need that money to pay for are getting more expensive.

That has implications for emergency savings. Financial advisers generally recommend setting aside three to six months of expenses, and up to 12 months for a business owner.

“I advise people to check their target every quarter now. Not once a year. Quarterly. Because the cost of living is moving that fast,” said Jehnelle Campbell, financial adviser at Marathon Insurance Brokers.

The choice of where to hold those funds is also important, particularly given the need to balance accessibility with preservation of capital.

CAMPBELL…you want something that protects your principal. I’m talking about the money market, fixed-interest accounts, and high-interest credit union accounts, where your main money is safe.

“You want something that protects your principal. I’m talking about the money market, fixed-interest accounts, and high-interest credit union accounts, where your main money is safe,” she told the Jamaica Observer. “If you need it, you might lose the interest for that month, but you don’t lose your principal.”

With inflation at 7.9 per cent, there are currently few relatively low-risk options offering returns that keep pace with inflation. Campbell noted, however, that the objective of an emergency fund should be to keep the money accessible when it is needed.

“Your emergency fund is not supposed to make you rich. It’s supposed to keep you safe. Safety, security, and you can access it in 24 to 48 hours when life happens. That’s the job,” she said.

For households struggling to save as higher prices absorb more of their income, Campbell recommends conducting a 30-day review of spending to identify where adjustments can be made. But she said reducing expenses may not be sufficient where income is failing to keep pace with rising costs.

“With 7.9 per cent inflation, budgeting alone won’t save you. You have to find a way to increase income. One income is very tight right now. You need a second stream, even if it’s small,” she said.

Although the BOJ has described the recent spike in inflation as temporary, the central bank has not given a timeline for when inflation will return to its 4-6 per cent target range. It expects inflation to remain above the upper end of the target in the near term before moderating. However, the outlook remains uncertain, with drought conditions, transportation and energy costs, and geopolitical developments among the risks that could push inflation higher.

“Those things are not in our hands, we have no control over them, and the risks over the next eight quarters are skewed to the upside,” BOJ Senior Deputy Governor Wayne Robinson said while speaking on the BOJ’s Deep Dive podcast.

He noted that these risks could materialise and push inflation higher. If inflation does rise further, the BOJ’s Monetary Policy Committee would assess the situation before making further decisions.

“Nobody should mistake our patience for being passive. We take the policy decisions that are always in the best interests of Jamaica and the people of Jamaica,” Robinson said.

So if you’ve been trying to save and keep finding that you’re coming up short, don’t be so quick to blame yourself. The amount it takes to get through the month has changed, and that changes how much you can realistically put away.