How does unanticipated inflation primarily affect the purchasing power of consumers and the savings of individuals?

Unanticipated inflation occurs when prices rise unexpectedly, which can significantly impact how much consumers can buy with their money. When inflation is higher than expected, the value of money decreases, meaning that consumers can buy fewer goods and services than they could before. For example, if you have $100 and inflation causes prices to rise by 10% unexpectedly, that $100 will only buy what $90 could have bought before the inflation. This situation also affects savings because if people have money saved in a bank account with low-interest rates, the real value of their savings diminishes as prices rise, making it harder to afford things in the future. Overall, unanticipated inflation erodes the purchasing power of consumers and reduces the effectiveness of savings, leading to financial challenges for individuals.