Remember when a slice of pizza was $1.00 or a cup of coffee was 50 cents? (If that was before your time, bear with us.)

These days, depending on where you live, a slice is about $2.00 and a cup of ordinary non-designer coffee is about $1.25.

That's inflation. It's not a surprise. But it's common to think of inflation retrospectively: "God, remember when it was only $4.50 to see a movie!"

When it comes to money, you have to cast your eyes and your wallet forward: What impact will inflation have on your savings in years to come?

Assuming inflation increases at the rate of 3% per year (historically, the average is about 3.4% per year), by 2040 you would need about $4.85 to buy a slice. Yep, five bucks for a scant triangle of tomato sauce, crust and cheese.

Now imagine similar, inexorable price increases across the board. How much more is your life going to cost in 10, 20 or 30 years?

That's why it's vital to save, save aggressively, and to learn how to invest your money. Ideally, the return on your investments will help your savings grow, and protect your cash from inflation.

Because you want to eat more than pizza when you're 65.

Questions about inflation? We had fun comparing past prices to the present here, and learning more about inflation here.

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The primary reason many people (especially women) feel anxious and alienated by the investment world is they don't know the lingo.

Think about it. Most women can quickly decode the following:

Sales of the new Donna Karan Hobo soared after Michelle Obama was seen with this luxe tote (and a pair of Chrissie Lous). Roll over, Miu Miu!

It didn't take years of study to know what a Hobo bag was (or why you wanted one). Regular exposure to the names of products and the trends behind them has made you fashion fluent.

Now we'll do the same with your finances. Here, two terms to start the year:

Mutual Fund: A mutual fund is like a huge case of wine, holding many bottles: i.e. various stocks, bonds and other investments. By putting your money into a mutual fund-which is what most investors do--you buy a bit of all those different investments. The sheer diversity of items helps to keep returns (profits) high.

Ticker symbol: Every investment that is publicly traded has a name, but is known by its ticker symbol, which look like the call letters of a radio station. WFMI is the ticker symbol for Whole Foods stock, for example. JABAX is the ticker symbol of the Janus Balanced Mutual Fund. To decipher what's in your 401k or IRA, find out the ticker symbols of your investments and type them into Google to begin to explore what you've bought.

Check out Marketplace Money 101: Buzzwords—free minute-long vocab lessons on iTunes.

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The Federal Deposit Insurance Corporation, or FDIC, is an independent U.S. federal government agency responsible for maintaining consumer confidence in the banking system. It does that by insuring your checking and savings account deposits for up to $250,000 per depositor; after January 1, 2014, that number will drop to $100,000 for all accounts, except IRAs and other kinds of retirement accounts. The agency is funded by member banks, which have to meet certain liquidity and reserve requirements. If they don't, they get a warning. If problems continue, the FDIC can force a regime change at the bank or take other action.

Created in 1933 following the crash of 1929 and the failure of thousands of banks, the FDIC is responsible these days for protecting nearly $4.5 trillion in bank deposits across the country. But with the recession and government bailout of numerous banks over the past year or so, the FDIC recently revealed that its reserves are at their lowest – just $10.4 billion – since 1993. But don’t stuff your money under the mattress just yet. The agency can always bail itself out by borrowing money from the federal government. Hmmmm.

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Compound interest is the interest on a total amount (or principal) that includes previous interest earned.

Say you have 1,000.00 in your savings account, and your bank is paying you 3% monthly interest (Okay, it's a little high, but we can dream, can't we?). At the end of January, you'll have $1,030.00 in the account, which then earns the same 3% interest the following month. So at the end of February, once the 3% interest is added to the principal, your account will have $1,060.90. Nice, huh?

Compound interest is a good thing if you're talking about a Certificate of Deposit or your savings account. On the other hand, it's not so great if you're racking up debt every month on your credit card and not paying it off in full. You could end up with ever-growing principal, along with previously applied interest and any late charges. So take the money you're hankering to charge up, and deposit it in your interest-bearing savings account. And watch your money grow.

Check out this expanded definition of compound interest on Fool.com.

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Today's post was authored by Galia Gichon of Down-to-Earth Finance with support from Kathy Ivens of CPA911.com.

You're feeling more secure about your job, so you decide to renovate your outdated 1970s kitchen.  Your bank quotes you a $10,000, five-year Home Equity Line of Credit ("HELOC") loan of prime interest rate (aka "prime") 1.  Prime is 3.25% as of July 22, 2009. The prime interest rate in the U.S., which can change at any time, is set by the country's largest banks and reported by the Wall Street Journal. The rate is based on the federal funds rate that is set by the Federal Reserve. The federal funds rate is the interest rate at which banks and other depository institutions lend money to each other, almost always on an overnight basis. The federal funds rate is also used to control the supply of available funds and hence, inflation and other interest rates.

Primed
At prime minus 1, what will your monthly HELOC payment be?  Your rate to start will be 2.25% (derived from 3.25% - 1%).  The cost to you is $176 a month for the interest payment only; but remember you also have to pay off the principal and the longer that takes the more interest expense you'll have. Under these terms, as rates rise, so will your monthly payment. Is the new kitchen worth it?

Is it Worth It?
You can only answer that question with some research. What would the new kitchen add to the selling price today? More than the amount of the loan plus the interest payments? (Hint: for kitchens and bathrooms, the payback is almost always more than the cost of the improvement unless you go crazy with extremely expensive gadgets.)

Which Pot
If it's just a matter of wanting a new kitchen because it makes life easier for you, then you can disregard the resale value numbers in favor of buying yourself a better lifestyle, and that's a matter of deciding whether the increased expense is affordable and won't cause financial problems. However, if you don't care about increasing the value of your home, you should probably try to use savings instead of a Line of Credit (or use the Line of Credit for some minor percentage of the cost if your savings don't cover the cost).

The Point
A Line of Credit is a bad idea unless the point of using it is to gain back the cost of the interest through an increase in value. A Line of Credit must never be used to cover regular living expenses, or to buy something that doesn't have a financial payback down the road. Even at a low interest rate, if you use Line of Credit funds to pay regular bills or buy non-appreciating products, you're paying considerably more than the real worth of each bill payment or purchase, which is like taking the money that went into the interest payments and putting it in the barbeque grill and burning it.

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Ok, maybe not so sexy, but we think it's worthy of some air time.

A capital gain is the difference between purchase price and the selling price of an asset. In other words, if you bought $150,000 worth of stock and sold it three years later for $400,000 (okay, maybe not in the current market, but someday...), your capital gain would be $250,000 -- minus any commission for the broker. You only enjoy a capital gain when the selling price of said asset is higher than the purchase price. So if you sold the stock for $50,000, but paid $150,000 for it, that would be considered a capital loss, because you took a bath when you sold it.

Now comes the tax. Basically, the capital gains tax is a tax on your capital gain, and it can vary, depending on how long you've held onto the investment between buying and selling it. Let's go back to the stock you're selling. If you unload it less than a year after you bought it, and you make money on the sale, that's considered a short-term capital gain. If you wait at least a year and a day - or five or 15 years - to sell it and still make money on the sale, that's considered a long-term capital gain. The short-term and long-term part of it is determined by how long you've had the asset. The magic number for short term is a year or less; for long term, it's a year and a day or longer. (Who comes up with these numbers?) A short-term gain is taxed at your marginal tax rate -- which could be 25% or 35% or something else -- but the tax on a long-term gain tops out at 15%. As you can see, it pays to hold onto your stocks and bonds longer because you're taxed less when you sell them.

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A growth fund is essentially a mutual fund that invests in growth stocks, and doesn't pay dividends. The goal of a growth fund is to reap the rewards of healthy capital gains by buying into companies whose earnings or revenue is soaring and being reinvested in expansion. As those companies do well, so does the fund. But when they tank, they take the fund down with them. They tend to be more volatile than other kinds of mutual funds — up more in a bull market and down more in a bear. This is what makes growth funds so potentially lucrative — and also risky.

Get educated on the top-rated growth funds and what they offer with this article from Morningstar.

Sell Your ASSets (or, what not to wear to a sales meeting) by Amanda Steinberg

Last week I scored a drool-worthy sales meeting for my Web consulting company. Winning this contract would add a blue-chip client to our roster and serious inflation to our bank account. The night before the meeting, I was anxious. What should I wear? read more ...

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If you need a steady income stream to look forward to in your golden years, you may want to include an annuity in your grand plan. An annuity is an insurance product, not an insurance policy, that's available at most life insurance companies. You invest in the annuity, either in a lump sum or in increments (like a pension plan), and then your money grows tax-deferred, usually at a fixed interest rate. Somewhere down the road - but not before you turn 59 ½ (unless you want to pay the IRS a 10% penalty) - your annuity pays you back. You can recoup your investment all at once, or monthly, quarterly, even annually. And the longer you live, the more you get.

Find out about the different kinds of annuities and how they work: Annuities Institute - Annuities Explained.

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We're hearing a lot about IRAs lately, what with pension plans sucked bone-dry by the stock market and bank-failure debacle. So we thought it would be helpful to understand what IRAs really are and how many different kinds are out there.

An individual retirement account, or IRA (not to be confused with your bubbie's other grandson), is essentially a retirement plan that allows you, the taxpayer, to set aside funds, usually tax-deductible, for your golden years. And you can generally invest those funds in whatever you like: stocks, bonds, real estate, mutual funds, etc.  There are seven different kinds of IRAs, although two of them - the Rollover IRA and the Conduit IRA - are now considered obsolete. Here's a brief rundown on one in particular: the Roth IRA.

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