What is Inflation?
The word “inflation” is thrown around a lot these days, but what it means is oftentimes misunderstood. We are all affected by inflation because the prices of goods rise while the value of your money slowly decreases making it difficult to afford the same things we would normally. This can create many problems for both individuals and families as the cost of living increases and we are forced to find a way to make ends meet despite not having as much purchasing power.
When I first learned about inflation and how it affected the economy I was shown something that changed my entire perspective: movie tickets. While this may seem simple, I was shown the price of a movie ticket from 1980 and another one from 2019 and was able to see the difference in cost. A movie ticket in 1980 cost $2.69 but when compared to the average price of a ticket in 2019, $9.16, you can see just how much the price increased . What this shows is the difference in value of money in a 40 year span and how the value decreased over time. The price of tickets more than tripled and going to the movies became a far more expensive trip.
The issue that comes from inflation is that we lose a lot of our purchasing power due to our money being worth less. If you had $10 in 1980 you could buy 3 movie tickets and still have extra money for candy or drinks, but if you had $10 in 2019 you could afford one movie ticket and that would be it. Because of this, we have less purchasing power as our money does not buy as much as it used to. This loss of purchasing power can be very hard on us as we now have to spend extra money to get the things we need, possibly throwing off our budget and financial goals.
A loss of purchasing power can be offset by an increase of income or a decrease in spending, but for those of us already living on a tight budget, decreasing spending can be extremely difficult and not realistic at times. Increasing income is a possibility but would likely require an additional job which is difficult as we still have the same amount of time in our day as before and fitting in another job is not easy. This can make living with inflation extremely strenuous and something that affects all of us.
For those of us that are living on a tight budget and are finding that inflation is making it near impossible to stay under our spending limits, here are a few tips that can help you save extra money. Canceling recurring subscriptions can be a great way to save extra money and limit unneeded spending. Many people, myself included, have multiple streaming services that they pay for every month, and cutting some of those subscriptions can help save money. Many TV, internet and phone providers also offer lower prices for customers who bundle multiple services together helping save money. This trick can be very useful and something worth looking into with the provider you use for your TV, internet or phone.
All numbers were gathered from the National Association of Theatre Owners website: http://www.natoonline.org/data/ticket-price/.
