Is Inflation as Big of a Problem as It Seems?

“Inflation is here! How it will impact everything from your mortgage to your credit card interest to your car loan…”

We try VERY hard not to watch the news in our house.

It’s inflammatory and usually doesn’t tell the whole story because sound bytes are sexy, but not always factual. That being said, my mother in law is visiting this week, and like many people, she does watch the news so it’s been on in our house.

When I heard this hook while I was washing the dishes I didn’t know whether to roll my eyes or laugh. It’s absolutely ridiculous. EVERYONE and their brother is talking about inflation and stressing out over it, and it shows both by how the stock market is being impacted right now and how it suddenly seems to come up in casual conversations with non-clients in regular everyday life despite how hard I try to avoid it LOL.

Let’s be real: inflation “suddenly spiking” has not done anything to your 30 year mortgage payment, your car note, or your credit card interest rate.

It hasn’t. If you’re like most people, your mortgage rate is a FIXED rate that can’t just be changed on you. And if you’re one of the many people who refinanced at the historically low rates we’ve experienced in the last 3 years, you’re likely locked into a rate you couldn’t have imagined getting even 5 years ago.

I bought a car in the last two years that we financed- the rate is 1.99%. That is fixed. If you have a car payment- that isn’t changing regardless of what inflation does. And if you have credit cards, and your credit SCORE hasn’t changed, your interest rate is very likely the same.

Inflation going up doesn’t impact your fixed debt payments- period. It impacts the rates you can get new debt at, but you don’t own the thing yet.

And, I have many clients in the process of refinancing student loans now after “rates have gone way up because of inflation” so everyone is saying, but the actual rate quotes from the banks for refinances are in many cases lower than mortgage interest rates. You can still refinance student loans for between 2 and 4% and that’s not expected to change until March.

My point is, paying attention to the media especially when it comes to financial topics will at the very best stress you out and at the very worst cause you to make very stupid decisions in trying to avoid whatever you’re being told is happening. It’s really dangerous and I can’t understand WHY people actually buy into, and parrot so much misinformation.

I have a lot more to say about inflation, but I’ll save that for another post later this month. For now know that it’s not as big of a problem as everyone is making it out to be- ESPECIALLY if you invest your money.