MoneyMakingEasier

A lot of people know what inflation is, but they don’t really know why it happens. Inflation is actually very important to understand because if you don’t then when you save for something and don’t have enough money for it because it became more expensive, you won’t know why. In this blog I will be telling you what inflation is and why we have it in the first place.

Inflation is when things become more expensive over time. An example of that is, renting houses. House renting used to cost a lot back in the days and still does cost a lot. While people did manage to rent houses, it is harder to rent (for some people) now because of the rising inflation.

Another example is this year coffee can cost around $3 (not Starbucks coffee) but next year it will be $3.30 because of a 10% inflation growth. Why is that?

Economists believe it is because if people buy a lot of things the producers have less to sell. Over time people get more money (through raises). But if we didn’t have inflation the prices would stay the same.

Yes, you could have been rich but if everyone is rich then what is the point? You can buy whatever you want but so can everyone else. Then eventually people will not have that product anymore because it is being bought faster than being made. Inflation is the keep people in a reality check on what they spend.