Welcome to Fintastic Females, where, I, Rupali with co-host Kalyani, your finance expert hosts, embark on a journey to explore the mythical island of freedom together. In this episode, we’re diving into the hot topic of inflation. We’ve noticed how inflation has become a buzzword, appearing everywhere from social media to news channels. So today, we want to share our thoughts on inflation and its implications for you.

Inflation, in simple terms, measures the increase in prices of goods and services over time. We all experience it in our daily lives. Think back to your childhood when the same candy you enjoyed now costs more for your own kids. It’s a relatable example of how prices go up over time. Even in recent times, we’ve seen inflation affecting gas prices, where it pinches our pockets.

Now, let’s talk about the ideal levels of inflation and where we currently stand. Typically, a healthy economy aims for inflation rates around 2% to 3%. This range ensures a balanced pace of growth. However, when inflation surpasses 5%, it can take around 10 years for an economy to return to the 2% mark. And that’s something to consider.

In recent months, inflation has been a significant topic of discussion, with figures reaching 8.3%, 8.5%, and even higher. These numbers are concerning, especially since the US economy often reflects global trends. We’ve seen how economic crises in one country can have a domino effect on the global markets. So it’s no wonder inflation has become a major concern.

Furthermore, inflation is subjective to each individual’s consumption habits. The Consumer Price Index (CPI), which measures inflation, considers a representative set of goods. However, your personal inflation experience may differ if you consume different products or services. For example, if you rely on daily commutes, fuel price increases will impact you more than someone with shorter distances.

Given the high inflation rates, it’s crucial to make your money work for you and combat its effects. Simply keeping your cash in the bank or fixed deposits won’t be enough, especially when interest rates often fall below 3%. To stay ahead of inflation, it’s essential to explore other investment opportunities and financial strategies.

Now, let’s delve into why prices are going up and what’s driving inflation. The forces of supply and demand play a significant role. When supply is high and demand is low, prices tend to decrease. Conversely, when supply is low and demand is high, prices increase. Currently, we’re witnessing a combination of high demand and low supply, leading to price hikes.

The pandemic had a profound impact on the economy. Governments worldwide injected cash into the system to support individuals and businesses. This monetary support, combined with reduced interest rates, encouraged spending and kept the economy afloat. However, it’s important to recognize that this level of support is not sustainable in the long run. In conclusion, while inflation is a significant concern in today’s economic landscape, it’s important not to panic or jump to conclusions based solely on sensationalized headlines. It’s a complex phenomenon influenced by various factors, including supply and demand dynamics, government policies, and global events.

Remember, inflation is not an insurmountable challenge. By staying informed, making informed financial decisions, and seeking professional advice when needed, we can navigate the ever-changing economic landscape with confidence and financial well-being. Join us next time on Fintastic Females as we continue our journey to demystify finance and empower you with the knowledge and tools to thrive in today’s world. Until then, stay financially savvy and enjoy the freedom that comes with financial literacy.