AfroEconomics #61: Inflation

Inflation is the combination of two things: the increasing cost of goods and services we have to buy and a reduction in the purchasing power of your money. The cost of things is constantly rising. We all recognize that, especially when you look back over several years. Some items are increasing in price more than others — for example the rising cost of educating a child. According to the Consumer Price Index (or CPI) which the government uses to judge inflation, we’re looking at close to 2% inflation per year on average. But we all experience inflation in unique ways. The rising cost of medical care usually hits seniors harder than anyone else. It’s so important for us to think about inflation and prepare ourselves to stay ahead of it’s wealth-eroding effects. Check out how to include the impact of inflation in your financial plan.