Why it happens
Prices rise when demand for goods grows faster than supply, when the cost of making things goes up, or when there is simply more money moving through the economy.
Why it matters for you
Cash sitting in a low-interest account slowly loses buying power. If inflation is 3% and your savings earn 1%, you are effectively losing 2% a year in what your money can buy.
How people push back
This is one of the main reasons long-term money is often invested rather than only saved — historically, diversified investments have grown faster than inflation over decades.
Example
A candy bar that cost $0.50 in 1990 costs around $1.50 today. Same candy — the dollar just changed.