You see it on your bank statement. You see it on the scale. You definitely see it when you’re filling up your car at the gas station. But when we talk about what is an increase, we usually skip past the dictionary definition and go straight to the "so what?"
An increase is just growth. It's a jump from point A to point B. It is an addition to a base amount that results in a higher total. Simple, right? Not really. Honestly, the way we perceive an increase depends entirely on the context. A 5% increase in your salary is a win; a 5% increase in the price of milk is a headache.
Most people think they understand the concept because it’s basic math. But math is only half the story. There is a psychological weight to numbers going up that dictates how global markets move and how families plan their dinners. Understanding the mechanics of an increase—how to calculate it, how to spot a "fake" one, and why it happens—is basically the foundation of financial literacy.
The Boring Math (That Actually Saves You Money)
Let's get the technical stuff out of the way first. An increase is the difference between a new value and an old value, provided the new value is larger. If you want to get fancy, you call it "positive change."
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To find the percentage increase, you subtract the original number from the new number. Then, you divide that result by the original number. Multiply by 100. Boom. You have a percentage. For example, if a loaf of bread was $2.00 last year and it’s $2.50 today, that’s a $0.50 increase. In percentage terms, that’s a 25% jump.
It sounds small. Fifty cents? Who cares? But a 25% increase across an entire grocery bill is the difference between a comfortable month and a stressful one. This is where people get tripped up. We tend to look at the absolute dollar amount rather than the rate of change.
In the business world, "What is an increase?" often refers to revenue growth or market share expansion. Companies like Apple or Amazon don't just look at whether they made more money than last year. They look at the rate of the increase. If they grew by 10% last year but only 5% this year, they’re still seeing an increase, but Wall Street might treat it like a failure. It’s all about momentum.
Why Do Things Increase Anyway?
Prices don't just go up because CEOs are bored on a Tuesday. Well, usually. There are specific economic levers that force an increase in costs, wages, or value.
Supply and Demand
This is the big one. If everyone suddenly decides they need a specific pair of vintage sneakers, and there are only 500 pairs left in the world, the price is going to see a massive increase. It’s the "Taylor Swift Ticket" effect. High demand plus low supply equals a vertical line on a chart.
Inflation
You’ve heard this word a thousand times. Inflation is basically a general increase in prices and a fall in the purchasing value of money. According to the Bureau of Labor Statistics (BLS), the Consumer Price Index (CPI) tracks these increases monthly. When the cost of raw materials—like oil or grain—goes up, every company down the line passes that increase to you.
Value Add
Sometimes an increase is "earned." If a software company adds ten new features to their app, they might increase the subscription price. In this case, the increase reflects a change in the quality of the product. You're paying more, but you're (theoretically) getting more.
The Psychology of the Upward Trend
Humans are weirdly wired to focus on increases. There is a concept in behavioral economics called Loss Aversion. We feel the pain of a price increase much more acutely than we feel the joy of a price decrease.
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Think about your paycheck. If you get a $100 bonus, you’re happy for a day. If your rent goes up by $100, you’re annoyed for the rest of the year.
Context matters. An increase in "engagement" on social media might mean you’re becoming famous, or it might mean you said something controversial and everyone is arguing in your comments. Not all increases are healthy.
In the medical world, an increase in white blood cell counts can be a sign of the body fighting an infection. It's a "good" increase in the sense that the body is doing its job, but it’s a "bad" sign because it means you're sick.
How to Spot a Misleading Increase
Marketers are masters of manipulation. They love to use the word "increase" to make things sound better than they are. You’ll see a shampoo bottle that says "50% more volume!" More volume than what? The previous bottle? A travel-sized version? A competitor?
Common tricks include:
- Low Base Effects: If a company had 1 user and now has 2, they can claim a "100% increase in user base." It sounds massive, but it's still just two people.
- Nominal vs. Real: A "nominal" increase is the raw number. A "real" increase accounts for inflation. If you got a 3% raise but inflation is 5%, you actually took a 2% pay cut in terms of purchasing power.
- Cherry-Picking Dates: Someone might say, "We've seen a 40% increase in sales since June!" They might fail to mention that sales were down 80% in May.
Always ask for the "from" and the "to." If someone tells you there’s been an increase, demand the raw data. Percentages are often used to hide small numbers or embarrassing contexts.
The Impact on Your Daily Life
What is an increase if not a shift in your reality? When your property taxes increase, your monthly budget has to shift. When the temperature of the ocean increases—even by a fraction of a degree—weather patterns change and hurricanes get stronger.
We live in a world obsessed with "Up." We want our kids to increase their grades. We want our retirement accounts to increase in value. We want our life expectancy to increase.
But there is a limit. In biology, an uncontrolled increase in cell production is called cancer. In economics, a rapid, unsustainable increase in asset prices is called a bubble. Eventually, everything that goes up must either stabilize or correct.
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Actionable Steps for Managing Increases
Instead of just watching numbers change, you should probably do something about them.
- Calculate your personal inflation rate. Look at your top three expenses (usually housing, food, and transport). Compare what you paid last year to what you pay now. That is your real "increase," and it matters more than the national average.
- Negotiate based on value increase. If you’re asking for a raise, don’t just say you want more money. Show an increase in your output. "I increased lead generation by 20%" is a much better argument than "Everything is expensive now."
- Audit your subscriptions. Companies love the "sneaky increase." They’ll raise your monthly bill by $2 and hope you don’t notice. Check your statements every six months to see if your "standard" costs have crept up.
- Don't fear the volatility. In investing, an increase in volatility often scares people away. But for long-term growth, you need those fluctuations. An increase in risk is often the price of an increase in reward.
Understanding the "why" behind an increase gives you the power to react rather than just panic. Whether it’s a price tag or a performance review, the numbers are telling a story. You just have to be willing to read between the lines.
Analyze the trajectory, not just the snapshot. If an increase is sustainable, lean into it. If it’s a spike, prepare for the drop. Managing the ups and downs of life is basically just managing the math of the increase.
Check your last three utility bills. If you see a steady increase that doesn't align with your usage, it’s time to call the provider or look for a leak—literally or metaphorically.