Why is Inflation Good?

Inflation gets a bad reputation, but a small, steady amount of inflation can actually be a sign of a healthy economy. Central banks like the Bank of Canada typically aim for low and stable inflation (around 2%), not zero.

At that level, inflation can:

• Signal that the economy is growing, not shrinking

• Make it easier for wages and prices to adjust over time

• Gradually reduce the real burden of fixed-rate debt (like mortgages and some loans)

What’s not good is high, unpredictable inflation that eats into purchasing power faster than incomes can keep up.

How KOHO Everything Helps When Prices Are Rising

If inflation makes everything more expensive, the question becomes:
How do you make every dollar work harder?

That’s where KOHO Everything can help:

• Grow your savings with 3.5% interest rates, one of the highest in Canada

• Earn 2% cash back on groceries, eating, drinking, and transportation and 0.5% on everything else

• Unlimited transactions & e-transfers

• Pay no foreign transaction fees

• No minimum balance required

Why Economies Prefer Some Inflation Over None

Here’s why zero or negative inflation (deflation) is actually risky:

• When prices fall or stay flat for a long time, people may delay purchases, expecting things to get cheaper later. That can slow the whole economy.

• Companies earn less, which can lead to wage cuts or job losses.

• Debts become harder to pay back in real terms, because your income doesn’t rise while what you owe stays the same.

A bit of inflation helps keep spending, wages, and business activity moving, as long as it’s kept under control.

How You Can Adapt to Inflation

You can’t stop prices from rising, but you can:

• Keep everyday spending on a card that gives you cash back

• Store your cash in an account that pays meaningful interest instead of nothing

• Regularly review your budget and cut back on areas that have crept up quietly

Inflation is part of the system—but smart money habits can blunt the impact.