The "Silent Tax" on Your Wealth
Inflation is the rate at which money loses value over time. If inflation is 3% per year, your $100 bill will only buy $97 worth of goods next year.
This is why "safe" investments like keeping cash under your mattress are actually dangerous. You are guaranteed to lose purchasing power every single year.
Did You Get a Raise or a Pay Cut?
If you got a 2% raise this year, but inflation was 4%, you effectively took a 2% pay cut. Your standard of living went down, even though the number on your paycheck went up.
Use this tool to negotiate your salary. Show your boss that asking for 5% isn't a "raise"—it's just a cost-of-living adjustment to stay flat.
Common Questions
What inflation rate is used?
This calculator uses a standard average inflation rate of ~3.5% per year for estimation purposes. Actual inflation varies by country and year (e.g., 2022 was much higher).
Does this apply to savings?
Yes! If you had $10,000 in a savings account in 2010, that money buys significantly less today. This is why investing is crucial.