Pete Adney ‘Mr. Money Mustache’ has 3 tips for dealing with inflation

Mature man reads the label on a carton of milk.

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Inflation has been rising rapidly, but Mr. Money Mustache has some tips on how to handle it.


Key points

  • Financial blogger Pete Adney tells his readers not to panic about inflation.
  • He believes the big picture will take care of itself and that making a few changes can help ease financial stress.

Inflation has been a concern for just about everyone this year, and there’s no sign of it slowing down. The most recent numbers have rising inflation by 9.1%, the largest increase in more than 40 years.

Pete Adney, the man behind the popular Mr. Money Mustache financial blog, says that the first rule of dealing with inflation is not to panic. Although inflation is extremely high right now, the world economy will adjust over time.

However, it may not be a quick process. If he’s stressed about inflation and wants to make some immediate changes, there are three things Adney recommends.

1. Don’t look at prices, look at relative prices

Adney’s first piece of advice is to change the way you look at the prices of what you buy. It’s natural to just look at the price itself and how much it’s rising. If milk goes up from $4.50 a gallon to $4.75, his knee-jerk reaction is that it is now costing more.

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What really matters is how much things cost. in relation to your income. If the price of milk is up 5% this year, but your income is up 10%, then you are still earning.

This requires that your income increase enough to keep up with inflation, or preferably more. If not, Adney says it’s time to negotiate a raise and start looking for new jobs.

It may take time to increase your income. Fortunately, Adney’s next two tips describe how she can adjust her lifestyle to reduce her own personal rate of inflation.

2. Make substitutions to reduce costs

When people worry about inflation, it is often a few specific expenses that affect their bank accounts harder than usual. Gas has been the most notable example lately, but you probably also notice other bills that are costing you more than usual.

Adney suggests looking for substitutions you can make to get away from things with rising prices. If his gas bill keeps getting higher and higher, he’ll see if there are more things he can do within walking distance. Try carpooling to work. You could also start looking for an electric car.

Changes like these can at least offset the impact of inflation, and you can also find ways to improve your quality of life.

3. Delay big expenses

Certain industries have experienced significant price spikes in recent years. If possible, try to avoid big spending in areas where prices have gone up. Prices return to normal over time, so if it’s not urgent, you can save money by waiting.

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Adney mentions how he delayed some woodworking projects due to high lumber prices in 2021, which started to drop this summer. We are seeing a similar trend in housing, where prices have skyrocketed and are now cooling off. car prices are a more current example, with consumers paying much more than usual for new and used vehicles.

With major purchases like these, the best approach is to be patient. Unless absolutely necessary, waiting for prices to come back to reality can help you avoid overpaying.

It’s easy to worry about inflation, especially with all the negative headlines about it. Adney gives some great advice on how to handle inflation, both in how he handles financial stress and in his budget.

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