Back in 1967, a ticket to the first Super Bowl required fans to dig into their pockets and pull out $12.00. Today, in the year 2017, a ticket to the Super Bowl sells for roughly $2,500.00 to $3,000.00, definitely not money most people have on hand. Although it might be astounding to think that in just 50 years the price of one ticket went up a couple thousands of dollars, it’s not as uncommon as we would think. Overtime, the price of items- even every day items like groceries and clothing- tend to increase drastically, and it’s all due to one thing: inflation.
Summed up, inflation is used to describe the overall increase in prices, and a decrease in the purchasing value of money. It is what happens to the market over the years as time progresses, and it is the reason why so many people find themselves trapped when planning to pay for something that’s dramatically increased in price, and decreased in value.
To form a broader image, take the example of a house. Think back to the very first house you bought and how much that down payment cost. Now, imagine that the very house you lived in is on the market for sale, do you think it would be selling for the same price? Odds are no, it would not be, because over time the housing market experiences inflation and a house that once was selling for $25,000.00 is probably now selling for around $300,000.00.
The problem then does not lie in people having the inability to plan for their futures, but rather, forgetting to factor inflation into the equation and as a result, being left with less money in their funds than they would have hoped to have. Often overlooked, inflation causes many, especially those who are entering retirement, to realize that they haven’t planned effectively because they didn’t account for the upcharge of products.
The best way to avoid inflation from affecting your life then is to talk with your financial advisor prior to retirement and ask them what choices and decisions you can make that will benefit you in your future. Although no one can predict exactly how the market is going to look 20 years down the line, meeting with your advisor and getting an idea is never a bad idea. Still, there are things you can do to help yourself, and that is to stay in the loop. Keep yourself up-to-date with what is going on economically, both in the world and in the town you inhabit, and pay attention to details. Do some background research to see how much things cost 10 years ago compared to how much they cost now and familiarize yourself with the concept of inflation.
While it may seem intimidating on the surface, once understood, inflation doesn’t have to affect you as much as you think it might. You can make sure to control your finances in a manner that allows you to live the life you want years down the line, regardless of how much prices increase, and feel great about doing so.