Inflation is a recurring topic in IELTS Writing Task 2, often appearing in questions related to economics and personal finance. The theme of protecting investments during inflationary periods has been featured in several past exams and is likely to continue being relevant in future tests. Let’s explore this topic through sample essays and in-depth analysis.
One of the most common question types on this subject is as follows:
Some people believe that during periods of high inflation, it is better to spend money rather than save it. To what extent do you agree or disagree with this statement?
Analysis of the Question
This question requires candidates to consider the merits of spending versus saving during inflationary periods. It’s important to note that this is an opinion-based question, asking for your personal view on the matter. A strong response should:
- Clearly state your position
- Provide logical reasons and examples to support your stance
- Consider counterarguments
- Draw a clear conclusion
Now, let’s examine three sample essays of varying quality, starting with a high band score example.
Sample Essay 1 (Band 8-9)
While some argue that spending money is preferable to saving during high inflation, I firmly believe that a balanced approach combining strategic spending and prudent saving is the most effective way to protect one’s finances.
Undoubtedly, there are compelling reasons to spend money during inflationary periods. As the purchasing power of currency decreases over time, buying durable goods or investing in assets that appreciate in value can be a wise decision. For instance, purchasing real estate or investing in stocks of companies with strong fundamentals can serve as a hedge against inflation. Moreover, delaying major purchases might result in paying significantly higher prices in the future.
However, completely abandoning savings in favor of spending can be short-sighted and risky. Maintaining a robust emergency fund is crucial, regardless of economic conditions. Unexpected expenses or job loss can occur at any time, and having liquid savings provides a crucial safety net. Furthermore, certain types of savings accounts, such as high-yield savings accounts or inflation-linked bonds, can offer returns that partially offset the effects of inflation.
The key lies in striking a balance between spending and saving, tailored to one’s individual financial situation and goals. This might involve allocating a portion of income to inflation-resistant investments, while still maintaining an adequate emergency fund. Additionally, focusing on reducing unnecessary expenses and increasing income can provide more resources to combat the effects of inflation.
In conclusion, while spending can be a viable strategy during high inflation, it should not come at the expense of financial security and long-term planning. A nuanced approach that combines strategic spending, smart saving, and income growth is the most effective way to navigate inflationary periods.
Analysis of Sample Essay 1
This essay demonstrates excellence in several key areas:
- Clear position: The writer clearly states their view that a balanced approach is best.
- Logical structure: The essay follows a coherent structure, discussing arguments for spending, then saving, before proposing a balanced approach.
- Specific examples: The writer provides concrete examples such as real estate investments and high-yield savings accounts.
- Advanced vocabulary: The essay uses sophisticated language appropriately, such as “hedge against inflation” and “purchasing power.”
- Cohesion and coherence: Ideas flow smoothly with effective use of linking words and phrases.
These factors contribute to the high band score of 8-9.
Sample Essay 2 (Band 6-7)
In times of high inflation, some people think it’s better to spend money instead of saving it. I partially agree with this idea, but I also think saving is important.
There are good reasons to spend money when inflation is high. First, the value of money goes down over time, so buying things now can be smart. For example, if someone wants to buy a car, it might cost more next year because of inflation. Also, some things like houses or gold can increase in value faster than inflation, so buying them can be a good investment.
However, saving money is still important, even when inflation is high. Having savings gives people security in case of emergencies. If someone loses their job or has a medical emergency, they need money quickly. Also, some banks offer savings accounts with high interest rates that can help fight against inflation.
I think the best approach is to do both – spend some money wisely and save some too. People should think about their personal situation and make a plan that works for them. They could invest in things that might increase in value, but also keep some money saved for emergencies.
In conclusion, while spending money during high inflation can be a good idea, it’s also important to save. Finding a balance between spending and saving is the best way to handle inflation.
Analysis of Sample Essay 2
This essay demonstrates a good understanding of the topic but lacks some of the sophistication of the higher band score essay:
- Clear position: The writer expresses a balanced view, which is appropriate for the question.
- Structure: The essay has a logical structure, but transitions between ideas could be smoother.
- Examples: The essay provides some examples, but they could be more specific and developed.
- Vocabulary: The language used is clear but less varied and sophisticated compared to the band 8-9 essay.
- Grammar: Sentences are generally well-formed, with some variety in structure, but lack the complexity seen in higher band scores.
These factors contribute to a band score in the 6-7 range.
Sample Essay 3 (Band 5-6)
In my opinion, I think spending money is better than saving it when inflation is high. I will explain my reasons in this essay.
Firstly, when inflation is high, prices go up fast. If you save money, it will be worth less in the future. For example, if you save $100 today, it might only buy things worth $90 next year because of inflation. So spending money now is better.
Secondly, buying things now can be a good investment. Some things like houses or gold can become more expensive faster than inflation. So if you buy them now, you might make money later when you sell them.
However, saving some money is also important. You need money for emergencies or unexpected things. But you should not save too much when inflation is high.
In conclusion, I think spending money is better than saving during high inflation, but you should still save a little bit for emergencies.
Analysis of Sample Essay 3
This essay demonstrates a basic understanding of the topic but has several limitations:
- Position: The writer states a clear opinion, which is positive.
- Structure: The essay has a basic structure, but ideas are not well-developed.
- Examples: The essay provides some examples, but they are very basic and not well-explained.
- Vocabulary: The language used is simple and repetitive.
- Grammar: Sentences are mostly simple in structure with limited use of complex sentences.
These factors contribute to a band score in the 5-6 range.
Key Vocabulary to Remember
- Inflation (noun) – /ɪnˈfleɪʃ(ə)n/ – A general increase in prices and fall in the purchasing value of money
- Hedge (verb) – /hedʒ/ – Protect oneself against loss on (a bet or investment) by making balancing or compensating transactions
- Purchasing power (noun) – /ˈpɜːrtʃəsɪŋ ˈpaʊər/ – The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy
- Appreciate (verb) – /əˈpriːʃieɪt/ – Increase in value or price over time
- Liquidity (noun) – /lɪˈkwɪdəti/ – The availability of liquid assets to a market or company
- Diversification (noun) – /daɪˌvɜːrsɪfɪˈkeɪʃn/ – The action of diversifying investments or spreading commercial interests into new areas
- Asset allocation (noun) – /ˈæset ˌæləˈkeɪʃn/ – The investment strategy of balancing risk and reward by apportioning assets according to an individual’s goals, risk tolerance, and investment horizon
- Yield (noun) – /jiːld/ – The income returned on an investment, such as the interest received from holding a security
In conclusion, the topic of protecting investments during inflation is a complex one that requires careful consideration of various factors. As you prepare for your IELTS Writing Task 2, remember to practice balancing different viewpoints, using specific examples, and incorporating advanced vocabulary. You might encounter similar questions about the impact of global economy on investments or the effects of inflation on savings behavior. To further enhance your skills, try writing your own essay on this topic and share it in the comments section for feedback and discussion. This active practice will help you develop the critical thinking and writing skills necessary for success in the IELTS exam.