We are constantly hearing about the Federal Reserve trying to combat inflation. Things seem tame for now, but gas price increases can be looming their ugly heads again soon. So does inflation help with getting out of debt?
So many of us have drank the Kool-Aid a few years ago with the inflation scenario: "Finance now and pay off later with cheaper dollars." That's what so many people did and it led to the ultimate real estate crash. Unfortunately, the plan would have worked if everyone's income increased at the same rate as or a greater rate than inflation. For most of us this never happens and probably won't.
Stagnant economic conditions resulting from significant price spikes in things like gasoline and food always add to your debt burden because inflation erodes the buying power of your paycheck. Don't ever find yourself drinking the Kool-Aid and get caught up in the "buy it now before the price goes up" hype or you'll just dig yourself deeper into the hole with debt.
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