This guide will focus mainly on how to combat the effects of inflation, but before we go there, we want to give a basic answer to the question “what is inflation?”

Basically, inflation is when the prices of goods and services go up. Inflate. Like a balloon with helium rising to the heavens.

It’s measured by how much prices go up and how the value of money goes down because of those price hikes.

Okay, inflation isn’t a new concept. This rise and fall has happened before, but in September 2022, the U.S. hit the biggest 12-month inflation surge in almost 40 years!¹

And you’re feeling it.

The 2022 State of Personal Finance study showed that 85% of Americans say inflation has impacted their lives.

Remember, inflation happens when the price of goods goes up. But what causes that? Three words: supply and demand. When people want to buy stuff (high demand) but there isn’t enough stuff for them to buy (low supply), well, the price goes up—in theory, to slow demand.

Basically, inflation makes the value of that $20 bill in your pocket drop over time. Remember how your grandparents talked about how they could buy candy for a nickel and go see a movie for under $1? Inflation is why we pay more for that stuff today.

Okay. So that’s your super basic Inflation 101 rundown. Now let’s talk all about how to overcome it. What’s your first step? Budgeting . . .