Daniel keeps hearing the word "inflation" on the news. He figures it means prices going up. But something about the way everyone talks about it suggests it's more serious than that.

So he asks his mom.

And his instinct turns out to be right — inflation isn't just about prices going up. It's about money going down. Specifically, it's about purchasing power — what your money can actually buy. A dollar today buys less than a dollar did twenty years ago. The number on the bill hasn't changed. What you can do with it has.

One common reason inflation happens is too much money chasing too few things. If everyone suddenly has more money to spend but the amount of stuff available stays the same, sellers can charge more — and they will. This is exactly what happened during the pandemic. Many people received extra money to help them throug ...