Exercise 1

Teaching Kids About Inflation.

Inflation is a big word, and a pretty complex concept, too. But, with help, kids can understand what it means and see how money can actually lose value over time and prices generally go up over time. Smart saving doesn’t only mean setting money aside; it means thinking about how inflation could affect it in the long term. 

Inflation is the increase in prices of products and services over time, which causes money to lose some of its value. Over the course of their lives, kids likely haven’t seen a noticeable increase in the cost of goods. However, talking with family members at home can give them a better idea of how things like candy bars and soda have risen over the years. 

At home, have kids reach out to older family members to ask the approximate cost of the following items when they were children:

  • Candy bar (cost and year)
  • Can of soda (cost and year)

Fill out the chart below to help demonstrate how the cost of products tends to rise over time:

(You can find the historical prices of more products at foodtimeline.org/foodfaq5.html#candybar, if desired.)

Year Hershey Bar Coca-Cola
1900 2 cents (in 1908) 5 cents