I like eggs. I don’t eat them every day, perhaps a few times a week. I also like a piece of turkey sausage with them (Jimmy Dean is the product name, but I’m guessing that none of you have ever heard of him or his sausage.)
My wife says I make (fried) eggs well, maybe because I have been doing it for so long. It’s not that hard. The goal is not to break the yolk if you want to fry them.
I went online and discovered that I can buy an automatic egg cracker that 1) never breaks the yoke and 2) does not leave bits of the shell in the fry pan. (I cook them over medium, which, for the unfamiliar, is runny yellow but not white.) There are a ton of them for sale—thank you, Amazon!
But there is a problem: Eggs are expensive (although down from a month or two ago)—almost everything is these days, as we are coming out of a period of high inflation after decades of relatively low inflation. We have all been hoping for lower costs across the board, but that hasn’t happened even though inflation has moderated.
Still, grocery prices remain inflated; from where I sit, they will not likely come down anytime soon. Due to the cumulative effects of inflation, there is a difference between the current inflation rate and the current cost of goods.
While recent data shows inflation has cooled to 2.4% as of March 2025, the aftermath of the previous spike continues to affect many Americans. The cumulative effect of sustained high inflation has eroded purchasing power, making it harder for families to maintain their standard of living. In fact, from 2020 to 2023, the average annual increase in the Consumer Price Index was 4.5%, highlighting the persistent pressure on consumers.
Consequently, many individuals and families have had to decide where and how they can cut back. Perhaps they can make fewer trips to local restaurants, purchase less expensive cuts of meat at the grocery store, or carefully consider their Netflix, BBC, and Paramount+ subscriptions. Every dollar counts these days.
I don’t really like any of these options. My wife and I want to eat out occasionally, eat nice meals at home (most of the time), and enjoy watching good movies on TV. I suspect you are a lot like us; just younger, so your tastes in food and films may be a little different.
Inflation happens when your money's purchasing power slowly erodes over time. That occurs when purchasing the same goods or services takes more dollars. It’s why your $5 coffee might cost $6 next year, and why a starting salary that sounds decent today might not go as far in the future.
The average inflation rate has been around 3% per year, but it can fluctuate significantly from year to year.
Inflation matters most when prices go up for the everyday things you need: groceries (which include eggs), gas, rent, utilities, etc. But it also affects your income. Even if you get raises or promotions, your income may not keep up with inflation. If it does not, your income will buy less year by year.
Let’s say you got a 3% raise last year, but inflation was 4%. That means, in real terms, your buying power went down. You’re technically making more, but everything will cost you more, so you can afford less. Inflation doesn’t just make things more expensive; it changes how your money works.
Inflation has a negative compounding effect: 3 percent inflation one year with 4 percent inflation the next is total compound inflation of 7.12%, not 7.0% (which you might expect, but that’s a simple sum). Here’s the formula and the example calculation to illustrate (r=inflation rate and n=year):
Formula:
Calculation:
Very long periods of high inflation can be particularly damaging. Here’s a quick picture of inflation's “reverse compounding” effects over a long time. It shows how, with 3% inflation per year, the purchasing power of $10,000 has been reduced by almost 50% to $5,537 in 20 years.
Lots of things can cause inflation. Basically, it is caused by “too much money chasing too few goods.” That can happen because of increased demand, supply shortages, or—more often than not—monetary policy decisions like printing more money or keeping interest rates too low.
We have experienced these things since the COVID pandemic, but some amount of inflation has been our constant companion. According to the Federal Reserve, as of April 2025, the cumulative inflation in the United States since January 2021 is approximately 21.3%, based on the Consumer Price Index (CPI). This means that, on average, prices have increased by over 21% during this period.
You won’t be surprised that the words “inflation” and “leading economic indicators" aren't in the Bible. But the Bible teaches that individuals (and governments) should have honest weights and measures. Deuteronomy 25:13 says, “You shall not have two kinds of weights in your bag, a large and a small” (ESV). Proverbs 20:10 warns, “Diverse weights, and diverse measures, both of them alike are an abomination to Jehovah” (ESV). And, Ezekiel 45:10 says, “You shall have just balances, a just ephah, and a just bath” (ESV).
When money loses value due to government policies or other economic disruptions, those on the margins suffer the most. That’s why inflation is sometimes called a “hidden tax”—it hurts many people quietly, behind the scenes.
Lower-income households often face higher inflation rates because they spend a larger portion of their income on necessities, such as food and housing, which have experienced significant price increases. This disparity means those with the least financial flexibility are hit the hardest.
Since inflation is primarily out of our control, what can we do as wise stewards? Here are some suggestions:
Boost your income over time (at least enough to keep up with inflation). Pursue skill development, promotions, and entrepreneurial income streams (a/k/a “side gigs”). The best defense is a strong offense; keep growing your earning potential faster than inflation eats into it.
Live Below Your Means (refer back to article #35). This is one of the best financial habits you can build in your 20s. If you always spend less than you make, you create margin, which gives you flexibility and resiliency.
Invest Wisely (we have not discussed investing yet—the “IE” lever—so more to come). Cash loses value in inflationary times. Stocks, real estate, and certain types of bonds (like inflation-protected treasury bonds) tend to perform better. Your investment strategy should aim for real (inflation-adjusted) growth.
Avoid High-Interest Debt (high interest rates lead to high payments, increasing your “personal” inflation rate). Inflation can sometimes benefit borrowers, but not when it comes to credit cards and personal loans with interest rates above 20%. Don’t bank on inflation to “bail you out.”
Track Your Personal Inflation Rate (Yes, it's a Thing). Everyone experiences inflation differently. If most of your spending is on rent, gas, or eating out, you may feel inflation more acutely. Knowing where your money goes will help you fight back effectively.
From a Christian perspective, financial stewardship involves managing what God has entrusted to us well, especially in uncertain economic times.
Inflation reminds us that we live in a fallen world. Political systems decay, economies break, but God’s principles still stand. Living with wisdom, practicing generosity, staying debt-free, and preparing for the future remain the best ways forward during inflationary times.
For reflection: Inflation can be a significant risk. It reminds us of the impermanence of material wealth and the importance of prudent financial planning and management. Biblical stewardship involves managing our resources wisely, especially during challenging economic times. You may not be able to control inflation, but you can manage your income and lifestyle to minimize its impact. You can navigate inflation's challenges while staying informed and proactive, while honoring your commitment to responsible stewardship. If inflation has put you in a bad financial situation, what can you do to improve it?
Verse: “The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty” (Proverbs 21:5, ESV).