Understanding Inflation and the Cost of Living

This module unpacks inflation—the rise in general price levels that erodes the purchasing power of money—and shows how it impacts everything from everyday snacks to your long‑term savings goals. You’ll learn what drives inflation (demand‑pull, cost‑push, built‑in, and currency effects), how it affects your wages, savings, and cost of living across locations, and practical strategies—budgeting, saving, investing, and skill‑building—to stay ahead of rising costs.

Learning Objectives:

Upon completion of this module, students will:

• Explain Inflation & Its Causes: Define inflation, illustrate how it works with real‑world examples (gum, video games), and distinguish between demand‑pull, cost‑push, built‑in, and currency‑driven inflation.
• Assess Personal Impact: Describe how inflation reduces purchasing power, impacts wages versus price rises, and erodes savings when interest rates lag behind inflation.
• Factor in Cost of Living: Compare how inflation and living costs vary by location and incorporate these differences into future budgeting and career decisions.
• Apply Protective Strategies: Implement tactics to mitigate inflation’s effects—budget adjustments, high‑yield savings or investments, skill development for higher wages, and living below your means.