A steady rise in the general price levels of goods and services over time is known as inflation. When inflation occurs, the purchasing power of the dollar is reduced. In other words, your money won’t buy as much tomorrow as it will today. Here’s a simple example. Let’s say you have exactly $1 to spend on a pack of gum. Today, that gum costs $1, and you can buy it. But, next year, that same pack of gum might cost $1.02 due to inflation. The same dollar that’s in your hand right now won’t be enough to purchase the gum next year.

Though you might not be old enough to see the “big picture” of inflation the way a grandparent or older relative does, you may have noticed some subtle changes over the years. Let’s say you were born in 2002. When you were six years old, a tall white chocolate mocha at Starbucks was $3.20. In 2018, the price was closer to $4.00. When you were eight years old, the average price of a new car in the U.S. was about $29,000. If you want a new ride in 2019, however, you’ll pay around $35,000. These changes might not be huge, but you can see how inflation can significantly change prices over longer periods of time.

To see for yourself how inflation has altered the value of money over the years, check out the Bureau of Labor Statistics’ inflation calculator.

It’s important to note that inflation is a general trend. The average prices of goods and services in an economy may go up over a certain period of time, but that doesn’t mean that the price of each individual product has gotten higher. As a matter of fact, the prices of some products may even go down. For example, some products get cheaper over time as they become more common or are produced more efficiently. Televisions and laptop computers, for instance, are much more affordable now than when they were first introduced to the market. However, since inflation is calculated as an average, these lower prices are not enough to keep the general rate from going up.

For more information on products that are getting less expensive over time despite overall inflation, read Sarah Crow’s article “20 Products Today That Are Way Cheaper Than They Were 20 Years Ago.”