Pete Adney ‘Mr. Money Mustache’ Has 3 Tips for Coping With Inflation

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


Key points:

  • Financial blogger Pete Adney tells his readers not to panic because of inflation.
  • He believes the big picture will sort itself out, and that making a few changes can help alleviate financial stress.

Inflation has been a cause for concern for almost everyone this year, and there is no sign of it slowing down. The most recent numbers have inflation surging by 9.1%, the largest increase in over 40 years.

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

It probably won’t be a speedy process, though. If you’re stressed about inflation and want to make some immediate changes, there are three things that Adney recommends.

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

Adney’s first tip is to change how you look at the prices of what you buy. It’s natural to just look at the price itself and how much it’s increasing. If milk goes from $4.50 a gallon to $4.75, your gut reaction is that it’s now costing you more.

What really matters is how much things cost relative to your income. If the price of milk goes up by 5% this year, but your income increases by 10%, then you’re still coming out ahead.

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

It can take time to boost your income. Fortunately, Adney’s next two tips describe how you can adjust your lifestyle to lower your own personal inflation rate.

2. Make substitutions to cut costs

When people worry about inflation, it’s often really a few specific expenses that are hitting 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 they normally do.

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

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

3. Delay big expenses

Certain industries have gone through significant price spikes in recent years. If possible, try to hold off on big expenses in areas where prices have gone up. Prices come back to normal eventually, so if it’s not urgent, you can save money by waiting.

Adney mentions how he held off on some woodworking projects because of high lumber prices in 2021, which started coming back down this summer. We’re seeing a similar trend in housing, where prices 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 it’s something you absolutely need, waiting for prices to come back to earth can help you avoid overpaying.

It’s easy to worry about inflation, especially with all the negative headlines about it. Adney gives some good advice on handling inflation, both in how you manage financial stress and your budget.

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