Why Prices Go Up

Inflation means prices generally increase over time, so each dollar buys less than it used to.

Real numbers:

Same movie, same seat, but the price nearly tripled in 34 years. That's inflation.

Why it matters for savings: If inflation is 3% per year and your savings earn 1% interest, you're actually *losing* 2% in purchasing power every year. Your savings account has more dollars, but those dollars buy less.

This is why investing matters. Historically, the stock market returns ~10% per year on average. After 3% inflation, that's still 7% real growth. Money in a 0.01% savings account? It's slowly shrinking in real terms.

The takeaway: Don't just save — make sure your money grows faster than inflation.

Imagine you could buy a big ice cream cone for $1 when your parents were kids. Today, that same ice cream costs $4!

Did the ice cream get better? Nope — same ice cream. So why does it cost more?

It's called inflation. Over time, things slowly get more expensive. It's like a sneaky price monster that makes everything cost a little more each year.

This is one reason why saving money in a piggy bank isn't enough — if prices go up 3% every year, your money buys a little LESS each year. That's why earning interest is so important — it helps your money keep up with the price monster!