Something's Eating Your Money!

The money that you're saving is worth less every year...why is that? And what can you do about it?

Two Cents on Twitter: @twocentspbs

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Two Cents was created by Katie Graham, Andrew Matthews, Philip Olson CFP® and Julia Lorenz-Olson and is brought to you by PBS Digital Studios. We love dropping some knowledge on all things personal finance and helping you make better money decisions.

Two Cents is hosted by Philip Olson, CFP® and Julia Lorenz-Olson
Directors: Katie Graham & Andrew Matthews
Written by: Andrew Matthews
Executive Producer: Amanda Fox
Produced by: Katie Graham
Edited & Animated by: Derek Borsheim
Images by: Shutterstock
Music by: APM

SOURCES:

[SeanLei]

So True! *If you don't get a 2% raise* then your salary has *decreased in value.* If you do get a 2% raise, don't be deceived! Your salary is *worth the same.*

[JohnHeng]

Annual 2% raises aren't raises 😂 they're just "inflation-adjustments." Don't think most people understand that!

[GhostSickness]

I thought this was going to be a video on how much money people waste on food lol

[geofferypmeyers]

I thought this was going to be a video about how much people spend on restaurants.. lol

[TavoGustavo]

I feel like you guys are my mom and dad telling me important life lessons and I can't thank you enough for it😍

[ChrisInvests]

A surprising amount of people fail to realize the power of inflation 👎

For example, they're happy when they buy a home and after 15 years it's gone up in value--about the rate of inflation.

[fakename]

I have noticed the effects of inflation I used to be able to get Burger King spicy chicken nuggets for $0.99 now they are $1.69

[Felipe.N.Martins]

When I was a child in Brazil (early 1980’s) my father would go to the supermarket on the same day he received his paycheck and would buy everything for the whole month. A delay of one day would literally mean less food! Basically every home had a refrigerator and an extra freezer to store food. I remember that monthly inflation was reported with a 2-digit figure, hitting around 80% in one single month.

[skr]

Cost of living has gone up significantly while same household income has been neutral for last 20-30 years

[einstein]

Hey, Madagascar - my beloved country made it to the video. And it's true, every year we get hit by cyclones coming from Indian Ocean and every year it gets worst. Climate change is real, people.

Great video - thanks for the enlightenment about inflation. Now more people knows about what the news is talking about when Feds want to cut or raise interest rates :-)

[faithinablanket]

I'm in college now, but this video did more for my understanding of the fed in seven minutes than nine weeks in an AP Macro course. Bless you guys and the good work you're doing!

[lambbone]

I love the production value but simple ness of these videos. Keep it up!

[thedude]

This and other financial youtubers really helped the more dreary view I had of the future. Keep it up

[dscrive]

This past weekend I was looking through a sears catalog from 1972 (I had a good reason) I noticed some things that I was thinking "wow, that was cheap" I then ran the prices through a inflation calculator and realized "oh, that's about the same" except TVs, those puppies have gone down in price, 400 bucks for a tiny color TV back then, 100 bucks for a much bigger color TV now.
Then, I looked up average gas prices adjusted for inflation, the price has actually stayed pretty consistent over the decades.
Of course, minimum wage doesn't move with inflation, which is why, adjusted for inflation, the minimum wage in 1972 would be nearly 10 dollars an hour today.

[ningunoningunos]

2Cents: *Makes video about inflation*
Me and my argentinean bros: Allow us to introduce ourselves

[TheSiddhiDesai]

Your videos are so easy to digest, even though I've learnt all this is my economics courses, the way you guys contextualise it to real world events and explain its use for saving and investing really helps put things in perspective. Thank you so much!

[xoVioleteyezxo]

It makes me sad that these videos weren’t available when I was in high school! I think all your videos should be mandatory viewing!! You do an AMAZING job of taking complicated topics and making them easy to understand. Thank you for making these videos!!

[LuckyDogProductions]

Home prices only increased 3 to 6% per year since the 1930's until the 2000's when BANKs jacked up the prices of existing homes to fuel the mortgage scam that came to a head in 2008, where BANKS increased the cost of the home on paper to sell to investors who thought the mortgage was attached to a larger home. In 1999 a blue coller home was $100k, by 2006 the same home was $500K, so the BANK could bundle and sell that debt to an unaware investor in the for of a CDO or CDS, that home value fell to about $300K after 2008, leaving the home buyer hold a big bag of debt on a crap home. Now home prices are at the artificial bubble rate so banks can run the scam again, and keep unfortunate home buyers that did not loose their home and savings due to Realitors, Lawyers, and Bankers as a team, assigning home buyers with SCAM mortgages, thus the home buyer loosing a down payment and the home if they could not weather the SCAM. Ask Bill Moyers at PBS, he knows.

[crystalb.]

I'm a simple woman, I see a two cents video, I click!

[PawStreetProwlers]

When you're in a job for 20 years, getting raises and promotions, and they hire temps at the same salary you're more