Why Does Everything Feel More Expensive? Inflation Isn’t as Distant as You Think

Have you noticed that everyday items seem to be getting moreexpensive?

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What used to buy you two liters of milk now barely gets you acoffee. The cereal, shampoo, and dish soap you always buy have started to creepup in price, little by little.

Behind all this is a word we often hear but rarely unpack: inflation.

In simple terms, inflation means your money doesn’t go as far as it used to. That same $100 that once filled a shopping cart might now only fill half. It’s not that you have less money, it’s that goods are more expensive — and your money has lost some of its value.

But inflation isn’t the enemy. It has always been there, sometimes mild, sometimes intense.

Why does inflation happen? There aremany reasons:

Global oil prices rise, increasing transportation costs.

Natural disasters reduce agricultural output, making food more expensive.

A surge in demand outpaces supply.

Governments print more money, increasing the supply and reducing its value.

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In essence, inflation isn’t caused by any one person or industry.It’s like a "thermometer" for economic movement. A little bit ofinflation is normal. It’s when it grows too quickly that it begins to feel likea burden.

Still, one question remains: when we hear the news say,"Inflation is at 3.4%," or "Core inflation is 2.9%," do wereally understand what that means?

Sometimes it seems like the numbers say everything is under control,but our wallets tell a different story.

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So why is that?

Let’s follow the day of an ordinary worker and use four keyindicators to explore what inflation really looks lik

1. CPI – the most commonly reported inflation number
2. Core inflation – a better view of the long-term trend
3. Perceived inflation – the price pressure you feel daily
4. Cheapflation – when even budget products start getting expensive

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Inflation isn’t a distant concept. It’s there in your shopping decisions, your morning coffee, and that moment of hesitation at the checkout.

Scene One: Nick’s Breakfast and the CPI

(Key term: Consumer Price Index)

Nick, 32, works in human resources. His morning routine is simple:toast, two eggs, a glass of milk, and a flat white from the café downstairs.

One morning, scrolling the news, he sees a headline: "Inflationhits 3.6%." He frowns. "That doesn’t sound so bad," he thinks,"but everything feels more expensive."

He’s not imagining it. That same cup of coffee used to be $4.50, andnow it’s $5.30. Eggs, milk, and bread have all crept up in price. His weeklybreakfast cost has gone from $35 to nearly $45.

So what does that 3.6% figure really mean?

That’s where the Consumer Price Index (CPI) comes in.

CPI measures a basket of goods and services that a typical householdmight buy — food, clothing, housing, transportation, healthcare, and more. Whenthe CPI goes up, it means that, on average, this basket has become moreexpensive.

So when the news says, "CPI rose 3.6%," it means that theaverage household’s spending basket is 3.6% more expensive than it was a yearago.

It makes sense, right? But Nick still isn’t convinced. His dailyspending feels like it’s increasing faster than that.

Which brings us to the next question: why does it feellike inflation is worse than the numbers say?

Scene Two: Lunch and the Long-Term View

(Key term: Core Inflation)

At lunch, Nick stops by a nearby deli. A basic combo — pasta, salad,and a drink — now costs nearly $15, up from the $12 he was used to.

He complains to a colleague: "Everything is going up.Especially food."

"Not necessarily," the colleague says. "It’s justgroceries and petrol. They go up and down a lot. It doesn’t mean inflation isout of control."

That’s when Nick first hears about core inflation.

Unlike CPI, core inflation removes the most volatile items —things like food and energy prices, which are sensitive to short-term shocks:

Heavy rains reduce vegetable harvests

Global events push oil prices up

Heatwaves increase electricity bills

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These can cause prices to spike temporarily, making the CPI appearmore unstable than the broader trend.

Core inflation filters out that noise. It’s often used by economistsand policymakers to judge whether prices are steadily rising over time.

Nick nods. He may not know all the numbers, but now he sees thelogic:

CPI reflects real-world price shifts. Core inflation is the map oflong-term trends.

Still, maps don’t always show you how deep the puddles are.

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Scene Three: Grocery Runs and Perceived Inflation

(Key term: Perceived Inflation)

After work, Nick drops by the supermarket. He only plans to grab thebasics: milk, cereal, eggs, a few vegetables.

At the self-checkout, he hesitates.

That little basket of essentials now costs more than $30.

He scrolls through old receipts. A year ago, the same set cost lessthan $20.

"Isn’t inflation only 3%? This feels more like 50%."

This disconnect has a name: perceived inflation.

It’s the version of inflation you feel — and it doesn’talways match the official numbers.

Why?

You tend  to notice the items you buy often.

Big items like housing or travel might weigh more in CPI, but they’re not part of     your everyday routine.

Daily goods like milk, eggs, and coffee have more emotional impact.

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So even if the overall CPI looks moderate, the pressure on yourdaily budget can feel intense.

Scene Four: Cheap Products, Rising Prices

(Key term: Cheapflation)

On Saturday afternoon, Nick goes for his weekly stock-up. He’s beensticking to budget-friendly choices — private label cereal, basic paper towels,on-sale detergent.

But lately, he’s noticed something odd: those budget choices arerising in price faster than the brand names.

His usual $1.80 cereal is now $2.90. Meanwhile, a mid-range brandhas only gone from $4.50 to $5.

"So even the cheap stuff… isn’t that cheap anymore."

That’s exactly what recent researchers have observed. In fact,there’s a term for it: Cheapflation.

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Although not a traditional economic indicator, a recent study byHarvard Business School shows that in inflationary periods, the cheapestgoods often see the fastest price increases. This is due to rising demand andfragile supply chains.

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For careful spenders like Nick, this shift doesn’t mean he can’tcope — but it does mean even the fallback options are moving targets.

That evening, Nick boils a pot of tomato and egg noodles. Nothingfancy, just his usual.

But this time, he finds himself double-checking the price labelbefore adding it to the cart.

In a time of constant price shifts, awareness might just be thenew budgeting skill.

Inflation Isn’t Always a Bad Thing

We often associate inflation with negative headlines, but alittle inflation is actually a sign of a healthy economy.

It means people are spending, businesses are growing, wages may berising, and the system is moving.

Most central banks aim to keep inflation within a moderate target —typically 2% to 3%. This helps avoid economic stagnation without creatingpressure.

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What matters most is when inflation rises too quickly, oroutpaces our ability to adapt. That’s when habits shift, stress rises, andeveryday decisions get harder.

Understanding inflation isn’t about worrying more. It’s about seeingclearly:

When we understand what’s happening around us, we make betterchoices.

And in times of uncertainty, clarity is a kind of strength.

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