What Is Inflation? Why Halloween Candy Costs More 🎃

Alexia. Alexia, come look at this. What? Did you find a real ghost? Worse. I found the price tag on this bag of chocolate. $17? $17. For candy. Is it made of gold? Does it come with a pony? Nope, just chocolate. Tiny ones. This is the scariest thing I have seen all Halloween, and I saw Gerald dressed as a pumpkin

Welcome to Money Smart Kids. I'm Alexia. And I'm Julia, and today is a spooky episode. Happy Halloween, everybody. Today we are hunting a monster that sneaks into candy aisles, costume stores, and even your piggy bank. Its name is inflation. By the end of this episode, you'll know what inflation is, why candy costs so much this year, why your money doesn't stay the same size, and the best part, how to fight back.

With flashlights? With brains, and maybe flashlights But first, a quick favor. A really important one. Is it giving me all your candy? Nice try. It's subscribing to Money Smart Kids. Wherever you're listening right now, on Spotify, Apple Podcast, Amazon Music, anywhere, find the follow or subscribe button and tap it.

Ask a grown-up to help if you need to. It's free and it takes about two seconds. That's faster than unwrapping a candy bar. And leave us a comment or a review. Tell us what you learned or what money question you want us to answer next.

Here's why it matters. Every time someone subscribes or leaves a comment, the app shows our show to more kids, and more listeners helps us make more episodes.

More subscribers means more episodes. More episodes means more Money Smarts for everybody. Wait, that's like compound interest, but for podcasts. Exactly. Okay, did you tap it?

Even Gerald subscribed with his beak. Thank you, Gerald. All right, Ghostbusters, let's go find that monster

Okay, so that $17 bag of candy, that's real. A big bag with 100 pieces of Halloween candy cost about $17 this year. How much did it used to cost? Five years ago, about $10. 10? So it went up seven whole dollars? That's like a whole extra bag of chips, plus a juice box. and chocolate got hit the hardest.

Do you know where chocolate comes from? The chocolate factory, obviously. Before the factory. Chocolate comes from cocoa beans. They grow inside big pods on trees, mostly in hot countries in West Africa, like Ivory Coast and Ghana.

Chocolate grows on trees? I'm moving there. A few years ago, these farms had really bad weather and sick trees, so there were way fewer cocoa beans. And when there's less of something everybody wants... The price goes up. Imagine a birthday party where there are only three slices of pizza left and 20 kids want one.

Someone is trading their whole goodie bag for that slice. Exactly. That's what happened with cocoa. . Chocolate companies had to pay way more for the beans, so they charged us more for the candy. But wait, I heard cocoa got cheaper again, so why is my chocolate still so expensive?

Great detective question. Chocolate companies buy their cocoa months ahead of time. So the chocolate in this year's Halloween bags were made with cocoa they bought back when it was super expensive. Oh, that's like buying a costume in September for full price.

Then it goes on sale the week before Halloween. You already paid. Too late. Too late. Prices go up fast, but then they come down slowly. Sometimes they don't come down at all And it's not just candy. My costume this year cost more than my costume last year, and last year's was bigger. It had a cape. Costumes cost more this year, too. Lots of costumes are made in other countries and shipped here on giant boats. Shipping costs money, and this year there were also new taxes on things brought in from other countries. Those taxes are called tariffs. Tariffs. That sounds like a dinosaur. The Tariff-saurus.

When it costs more to bring the costumes here, the store charges more for it. So, the costume didn't get any better, it just got pricier. Same costume, more money. Hold onto that thought, because it's the big clue about our monster. Oh, guess what Gerald dressed up as after he took off the pumpkin. What? A ghost.

He put a bed sheet over his head. Gerald found the cheapest costume in the world, free. He bumped into the door three times, though.

All right. Time to pull the mask off the monster. Inflation is when the prices of lots of things go up over time. Food, clothes, toys, movie tickets, gas for cars. So, like, everything at once? Not everything by the same amount, but lots of things, little by little.

And here's the sticky part. When prices go up, the same amount of money buys less stuff. How do your grownups even know how much prices went up? Does somebody go to every single store? Kind of actually. A part of the government called the Bureau of Labor Statistics checks prices every month.

Imagine a giant shopping cart filled with milk, bread, shoes, haircuts, gas, thousands of things. They check how much more that whole cart costs than it did last year. A giant shopping cart. I kind of wanna push that. The answer is called the inflation rate. It's like a thermometer for prices. Over the last year, prices overall went up about 4%.

What does 4% mean in kid language? In kid language, for every dollar something costs last year, it costs about four cents more now. So, a $10 toy from last year is about $10.40 today. It's not that bad. For most stuff, it's a little bit, but candy went up about twice as fast, almost 8%.

So, a $10 bag of candy last year is about $10.80 now. Candy's a fast monster, the fastest one on the block this year

Let's jump in on our time machine. This is a story about Gerald. Oh, no. Gerald saved $10 to buy a giant bag of bread, his favorite thing in the whole world. The bread cost exactly $10, but Gerald thinks, "Eh, I'll buy it later." So he hides his $10 under a lily pad. Smart duck. One year later, he comes back. The $10 is still there, nice and dry.

Yay, Gerald. But now the bread costs $10.40. Uh-oh. So he waits even longer. Three years later, he checks again. Still $10 under the lily pad, but now the bread costs about $11.25. But he didn't spend anything. Nobody stole it. It's still $10. It's still $10, but he can't buy the bread anymore. After three years, Gerald's $10 only buys about as much as $8.90 buys today

Wait, wait, wait, wait. So the money in my piggy bank isn't really safe. The number stays the same on the outside, but it's shrinking on the inside. Inflation isn't a monster that jumps out at you. It's a ghost. You can't see it and you can't hear it, but every year it sneaks in and takes a tiny, invisible bite out of every single dollar.

Julia, that is exactly it. Inflation is a money ghost. I am never sleeping again. Oh, don't worry. This ghost can be beaten. Remember our episode about money having babies? Compound interest? When you put money somewhere, it can grow and makes more money? Right. If your money grows faster than the ghost bites, you win.

But if it just sits in a piggy bank, the ghost wins a little bite every year. So a piggy bank is basically a haunted house for money? A very cute haunted house. Here's one more spooky fact. When prices go up about 4% each year, they double in about 18 years. 18 years? So a $2 chocolate bar today could cost $4 when I'm a grownup?

It could. That's why grownups always say, "When I was a kid, candy cost a nickel." A nickel?

Okay, Ghostbusters. When everything costs more, what can kids actually do? Julia, hit us with move number one. Move number one: be a price per piece detective. Here's a puzzle. A small bag has 50 pieces of chocolate for $10. A big bag has 100 for 17. Which one is the better deal? Ooh, listeners, take a guess before Julia tells us.

Divide the price by the number of pieces. Small bag, $10 divided by 50 is 20 cents apiece. Big bag, $17 divided by 100 is 17 cents apiece. The big bag costs less per piece. So you get more candy in every dollar. Detective skills. Move number two: try the store brand. The store's own brand is often cheaper and tastes almost the same.

Do a blind taste test at home. I volunteer to be the taster, for science. Move number three: reuse, swap, and make it yourself. More than half of families reuse a lot of their costume stuff year after year. You can swap costumes with cousins and friends, or build your own. A cardboard box robot, a bedsheet ghost.

Not a Gerald ghost. Cut eye holes, please. Move number four: wait for the sale. The day after Halloween, Halloween stuff goes on sale, sometimes half off. If you want decorations or a costume for next year, November 1st is your day. Move number five: needs before wants. When things cost more, ask yourself, do I need this or do I just want it?

Needs first, wants if there's money left over. And move number six: help your money grow. Remember our three jars, save, spend, and share? Ask a grownup to help you put some of that save jar money somewhere it can earn interest, like a savings account. That's how you fight the ghost.

Here's something really important. When prices go up, it's not just your candy monster, it's your whole family's budget. Groceries, the electric bill, gas for the car, new shoes, because somebody's feet keep growing. That's me. My feet are growing like crazy. Paying the bills is the grown-up's job, so you don't have to worry about it, but you can be on Team Family.

Here's how. Number one, turn off the lights when you leave a room. Electricity costs money. Number two, don't waste food. Eat your leftovers. Food in the trash is money in the trash. Even the broccoli? Especially the broccoli. Number three, help make the grocery list and, and stick to it at the store.

No sneaking stuff into the cart. Number four, be the family deal helper. Help a grown-up look for coupons and deals on the store's app. Number five, take care of your stuff like your backpack, shoes, and toys, so they last longer and nobody has to buy new ones. Number six, hand-me-downs are cool. Jackets, books, toys, passing things down saves money.

Hey, wait a second. Is that why I always get your old stuff? Moving on. Number seven, don't beg at the checkout. Those candy bars right by the register are a trap. They are a trap. A delicious, expensive trap. Oh, so when our parents say, "Not today," at the store, they're not being mean, they're fighting the money ghost.

Exactly. And now you know how to fight it with them

Okay, ghost hunters, let's recap. Three things to remember. One, inflation means prices go up over time, so the same money buys less. Two, money that just sits still slowly loses power. $10 today won't buy as much one year from now, and even less three years from now. Three, you can fight back. Compare prices, reuse, and swap.

Put needs before wants. Help your family and help your money grow. Ask your family these at dinner tonight. What did a candy bar cost when you were 10? What's one thing our family could reuse or fix instead of buying new? If we got $10 today, where should we put it so the money ghost can't bite it?

This week's challenge is the Halloween price detective challenge. Next time you're at the store with a grownup, find two bags of the same kind of candy or snack and figure out the price per piece. Which one is the better deal? And for the bonus round, ask the oldest person you know what their favorite candy cost when they were a kid, then tell us.

Leave it in the comments wherever you listen, and we might read it on the show. That's it for our spooky episode for Money Smart Kids. If you haven't subscribed yet, here's your chance. Tap follow or subscribe so you don't miss the next one. Leave us a comment and share the show with a friend who loves candy.

So everybody, I'm Alexia. And I'm Julia. Happy Halloween and remember. Don't let the money ghosts get you. Money ghosts get you. Gerald, take off the sheet. Stay smart. And stay money smart.