You don’t need me to tell you everything feels more expensive these days. From gas prices to groceries, diapers to drugstore essentials, it’s impossible not to feel the pinch every time you pull out your wallet for something. Paying for your essentials feels harder and harder, like hit after hit, especially when so many families were already struggling financially following the pandemic. So, how did we get here, and when will it end? What does that look like? Will the price of goods actually go down, or will things just remain steady for a while?
Scary Mommy spoke with a financial pro, who explained why everything is still so expensive and what the foreseeable future might look like.
What even is inflation?
First, it’s worth mentioning that it’s totally OK if your baseline knowledge of the economy is limited. It’s confusing and ever-changing, and frankly, low-key exhausting trying to make sense of it all.
Thankfully, Jennifer Seitz, CFEI and Director of Education at Greenlight, is here to help. “Put simply, inflation is the rate at which prices are increasing,” she says. “The higher the inflation rate, the more expensive goods or services become over time. Many factors in the economy can cause price increases on individual items or in certain areas — but when prices rise on average across all consumer goods and services over longer periods, it’s called inflation.”
Curious about how inflation is calculated? “Inflation is measured using price indexes, such as the Consumer Price Index (CPI),” says Seitz. “The CPI tracks the average change in prices of a basket of goods and services over time. The percentage change between two periods is then used to calculate the inflation rate using weighted averages. The CPI includes a majority of all goods and services in various categories of consumer spending.”
And if the current cost of living feels untenable, that’s because inflation broke a 40-year record in 2022, impacting everything from housing costs to medical care. It hasn’t slowed down since. “We’re definitely still seeing increase and that cumulative impact is upwards of 20% since the pandemic. So it’s definitely kind of a broader affordability issue for families with just the cost of everyday essentials,” Seitz says.
Why is this happening now?
The pandemic was the first domino to fall, disrupting supply chains, increasing demand for certain goods, and affecting the employment status of many Americans. While many of those economic disturbances have smoothed over by now, families who were financially impacted then may still be recovering, and having a harder time doing so thanks to 2026’s cost of living.
There’s inflation, yes, “but there are also really soaring oil and gas prices, which is adding even more kind of financial pinch for more households,” Seitz explains. “Another factor — wages have stagnated across industries. They haven’t kept pace with the rising cost of living; we’re seeing a real gap between what people earn and what they need to spend to maintain just their standard of living. So that’s why many families continue to feel stretched day-to-day — that combination of the rising prices and income that is not keeping pace with that.”
So, why can’t employers just pay better wages? “Several factors can contribute to wages not keeping up with the rising cost of living,” says Seitz. “Slow economic growth limits what companies pay employees. Technological advancements, global competition, and changes in the job market can impact wage levels. When wages do not keep up with inflation, purchasing power decreases, which means our money can buy less.”
Of course, it goes without saying that these compounded effects are felt the most among lower-income families who faced economic hardship before prices began rising to the record-high levels we’re seeing these days.
So, what does the future hold?
Unfortunately, it’s tough for even the pros to map out, says Seitz. “Economists predict that inflation will eventually slow down to the target of the Federal Reserve, which is 2% annually — but the timing isn’t certain.”
That uncertainty means a solid chance for a recession, which is defined as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real gross domestic product (GDP), real income, employment, industrial production, and wholesale-retail sales,” according to the National Bureau of Economic Research (NBER). Some economists are already warning of the increased likelihood of a recession in 2026, giving it as high as a 49% chance, according to USA Today.
It’s understandable if this is all making your head spin, but Forbes notes that recessions are actually relatively common and short-lived — it’s what separates them from a depression, which is worse and longer overall.
How do you explain all this to your kids?
As you’re cutting back on spending, you might wonder how to answer questions from your kids, who could feel overwhelmed by seeing parents and caregivers stressed. “We’re in a period of economic uncertainty, and the younger generations may not fully understand what terms like inflation really mean,” says Seitz. “Parents are on the frontlines of educating their kids about the world around them, and personal finance is at the forefront of everyone’s mind. A recent Greenlight survey found that 55% of all parents and teens said inflation was their biggest financial stressor.”
You should talk to your kids about what’s happening in the economy, Seitz says (keeping things age-appropriate, of course).
“There can be a disconnect between what kids think we can reasonably afford for the household and what parents know as the reality. I think one of the main ways is talking through cost trade-offs together. So, helping the kids understand how your household is prioritizing their wants against savings and needs, and explaining how those costs have increased and therefore they take a bigger portion of what that available money is for spending.”
