The increasing Inflation is becoming a huge problem to every country ‘s Economy. But what is Inflation? Is it good for our economy? Or bad? 

Do you know? maybe you don't know what Inflation is. Don't worry! After reading this article you can easily explain to anyone about Inflation.

Inflation

What is Inflation?

Have you ever wondered why the price of your favourite fruits,snacks and vegetables keeps going up or increasing? That is Inflation. We can say that the increasing price of things is called Inflation. Let's understand it with an example.

We are all familiar with milk. A day was when we could buy a litre of milk for only 20₹ but today it cost about 50-60 ₹. That is Inflation. Things are becoming expensive, and your money is becoming weaker.


Why does Inflation happen?

There are many reasons that lead to Inflation:

Demand - Pull Inflation:

 It occurs when the demand for products and services exceed their supply. When the supply of products and services is less than their demand, prices tend to rise. This is because more people are willing to buy that product but quantity is limited, leading to an increase in the price. Let's take an example.

Tomato prices were rising because of low supply caused by bad weather,transport issues and seasonal factors.


Cost - Pull Inflation:

overall price rises due to the increase in the cost of production. This happens when the essential raw material like fuel, wages, tax go up. As production becomes more expensive. Let's understand with a simple example 

When the price of fuel and electricity increases. Then the transportation and factory production becomes more expensive.

So, the company increased the product prices to cover extra costs.


Money Supply:

Money supply can lead to inflation when the amount of money in the economy increases faster than the supply of goods and services.

This causes higher demand, but limited supply, which pushes prices up.


Types of Inflation -

There are four types of Inflation 

Creepling Inflation - Rise Slow and steady which is good for economy 

Walking Inflation - Price ruse moderately, 2% - 10% annually.

Galloping Inflation - Price rise rapidly (Dangerous for economy)

Hyper Inflation - A situation where prices rise extremely fast, and the value of money drops sharply.


How does Inflation affect our life?

Inflation affects everything from grocery to rent. Here’s how-


Daily Expanse Increase - Due to the rising cost of product and services the daily expenses increase.

Saving lose it's value - Inflation eats the buying power of our savings if it isn't growing faster than inflation.

Loan EMIs remain the same, but cost rises - During inflation, loan EMIs remain fixed, but income and prices rise - so over time, the real burden of EMI becomes lighter.

Investing becomes important - Investment becomes important to beat Inflation.


How to protect yourself from inflation?

Start Investing Early: Start Early then you have more time to grow your investment.

Avoid keeping too much cash: because the value of cash decreases by time.

Buy assets that grow overtime: Like stocks, Property, Gold, mutual funds.

Track your expenses: You should know where your money is going.


Conclusion 

Inflation is not something we can ignore — it's a financial reality we all face. If we don’t take action on time, the value of our hard-earned money will keep going down. That’s why it’s important to start investing early, avoid holding too much cash, buy assets that grow over time, and keep track of our spending. These small habits can protect us from the impact of rising prices and build long-term financial security.


Start managing your money 

smartly today — because time and money wait for no one.