Inflation is good for you, and other money lies I have to dispute CNN

This post is a little different than what I normally write about. It isn't directly related to travel or homeschooling, but if you are passionate about saving money like I am, you may appreciate what I have to say here. And, sometimes, I get sick of hearing something so much that I get a bug in my ear and write until it's satisfied. Here is the link to the article  from CNN that has me up and typing like mad this morning. It begins something like this:

"... inflation can actually be a good thing for many working-class Americans, especially those with fixed-rate debt like a 30-year mortgage."

She argues that your house is increasing in value while your mortgage payment stays the same. This is true. However, this would be happening even if the prices on every other thing you buy wasn't tripling in price at the same time. And, this ONLY applies to that specific situation - renters don't benefit, those with variable rate mortgages don't benefit. And, if your mortgage payment includes taxes and insurance - those are going up along with everything else, so truly only a few are actually going to see their monthly payment stay the same. And, as I've seen a few times in my life, these rapid increases in housing prices are always followed by a housing dip, where the home prices plummet for a while.

She goes on to argue another benefit, saying "Meanwhile, wages are rising along with prices, essentially shrinking the real value of that debt." True, wages are rising, but I don't think they are rising at the same rate as prices, at least not in the area where we live. If your $10 an hour job becomes a $13/hour job, great - but after taxes, the increase is not enough to make up for the price of eggs which has gone from 89c a dozen last year to $4/doz now. Farm fresh eggs, that seemed outrageous at $3.50/doz are now the bargain option where we live. The rest of the grocery list is increasing at about the same rate.

She admits that 'wage growth broadly hasn't kept up with price increases," but "analysts say that may change." I don't know who the "analysts" are or what they are analyzing, but even they are hedging their comment with the word "may"

Maybe things will get better in a few years. Maybe your finances will improve they say. And, hey, she is quick to point out that "household incomes have been bolstered by government... stimulus payments and unemployment benefits," so if you are looking to the government to provide for your household, then you might be doing okay financially right now.

Then, she points out another benefit that you can look to. You probably didn't spend much in 2020 when you were locked up, so you've likely got substantial savings that you can spend on all these high-priced items.

Now, the headline is a little unfair - thank you click bait world - because she does point out that not everyone benefits from inflation as the article goes on. "Credit card interest rates... have shot up..." and "anyone living on a fixed income... aren't benefiting from wage increases." Also, she doesn't mention it, but anyone who is working a salaried position is not likely to see an automatic wage increase just because entry level hourly wages go up.

Then, she goes on to say that we should appreciate that the rich are going to be hit the hardest. Those who have "government bonds" The bonds I'm familiar with are those that grandparents and great uncles give as Christmas gifts to babies. My grandfather bought them for me, and my children have received them too. Not because we are wealthy but because it was a good way to help a child get a good start as an adult. Those $25 and $50 bonds must not be what she is talking about though, right? "...those bond holders, who are essentially lending money to the government, will be paid back in money that has less purchasing power." Oh, I guess she is talking about those kinds of bonds. 

"One in four people surveyed said inflation has worsened their living standards. And half said they expect inflation to wipe out whatever wage gains they were given over the past year."

Well, yeah, that's how it works when prices go up faster than wages do. I'm nearing the end of the article and I still don't see how I, or anyone else really is benefitting from the current economic situation. Oh, wait. I know who benefits. They ones pocketing the profits.

That's it. The article ends without much hope, or news even, to it. She's not telling anyone what they don't already know and see in their own shopping experience. So, I suppose I bought into the click bait, and I let the headline get to me. Shame on me.

What she doesn't offer is any way to combat the situation. One of my favorite books of all time, that has helped my family immensely, is The Tightwad Gazette. It is a compilation of newsletter articles that were written and mailed out to people who then wrote in and shared their money-saving ideas, that were then tested and printed for the next newsletter. This book collects all that wonderful knowledge, with test results and explanations as to how each idea saves you money. I read it early on in my marriage and have given it as a wedding present. If you are looking to beat the inflation monster, and just working more and making more money is not doing it for you, I suggest you look to resources like the Tightwad Gazette and get busy cutting your expenses. High prices only bother you if you are buying the item. Learn to Use it Up & Wear it Out, Make it Do or Do Without - those Depression era mantras that our grandparents often repeated, were not without wisdom.