Cash Under the Mattress for 10 Years: What Inflation Really Did to It

How to reproduce the calculation yourself

Multiply (1 + inflation) for each year: 0.995 × 1.014 × 1.025 × 1.028 × 1.020 × 1.028 × 1.121 × 1.110 × 1.032 × 1.042 = 1.492.

Prices today are therefore 1.492 times higher than at the end of 2015. A basket that cost €100 back then costs about €149 today. The purchasing power of the cash is €10,000 ÷ 1.492 = roughly €6,704, a loss of 33%.

For comparison: across the whole euro area, prices rose 28.8% over the same period (ECB Data Portal), so €10,000 in cash would retain purchasing power of about €7,764. Slovakia fared worse than the average.

The two years that did the most damage

For most of the decade you would barely have felt the loss. Then came 2022 and 2023, with inflation of 12.1% and 11.0%.

In those 24 months alone, prices rose 24.4% and cash under the mattress lost 19.6% of its purchasing power. Nearly a fifth of the value gone in two years, without a single bad decision, just by quietly waiting.

Even ideal inflation bites

The ECB targets inflation of around 2% a year. It sounds harmless. But 1.02 to the power of ten is 1.219: even if the central bank hit its target exactly, prices would rise 21.9% over a decade and cash at home would lose 18% of its purchasing power.

Money under the mattress does not lose only in bad times. It loses always, just at different speeds.

Why almost nobody feels the loss

A banknote is a strange liar. A ten-euro note still says ten, so the brain reports: nothing happened. Economists call this tendency money illusion, we judge money by its face value, not by what it buys.

We notice price rises on individual purchases, on butter, on rent, on fuel. But almost nobody goes back and recalculates what ten years of rising prices did to the cash that was safely lying there the whole time. The number on the envelope never changed, so the loss does not hurt. It is real all the same.

What this means for your emergency fund: hold it, but hold it right

This is not an argument against an emergency fund. The fund is the foundation, inflation is simply the fee you pay for certainty, and the right storage can cut that fee sharply:

• Keep 3 to 6 months of essential costs liquid. The fund's job is not to earn, it is to be available within 24 hours. With essential spending of €1,200 a month, that means €3,600 to €7,200.
• But not literally under the mattress. Cash at home earns no interest, is exposed to theft or fire, and is far too handy for impulse spending.
• A savings or interest-bearing current account offsets at least part of the inflation while keeping the money instantly accessible.
• Only the amount above the fund is a candidate for long-term growth. The reserve is not invested, the surplus is.

We covered exactly where to keep the fund and how large it should be in our guide on where to keep an emergency fund.

A model example: money beyond the reserve

Model example: if you let €5,000 above your reserve grow for 10 years at an illustrative roughly 7% a year, it would become about €9,836 (5,000 × 1.07 to the power of ten). Under the mattress, the same sum would retain purchasing power of around €3,352 under recent Slovak conditions. This is an illustrative calculation at roughly 7% a year, past performance does not guarantee future results, the value of an investment can fall, and this is not financial advice.

Step one: find out how much mattress money you actually have

The mattress does not have to be literal. Money sitting for years at zero interest in a current account loses purchasing power exactly like banknotes in a drawer.

If you want to see how much you have left each month and what reserve you can realistically build from it, upload one bank statement at app.vestelonflow.com. The VESTELON FLOW analysis runs in your browser, you see your number in about a minute, no account and no bank login needed, and nothing leaves your device without your consent.

You cannot avoid inflation. You can only stop paying it more than you have to.