How broken money changes how we live
This page makes an argument. Here is the reasoning, with the evidence we have, so you can judge it yourself.
Waiting gets punished
When money loses value, waiting costs you. A dollar saved today buys less next year. So the smart move becomes spending now.
Economists call how much you favor now over later your Time preferenceHow much you value having something now compared with later. When money loses value, waiting costs you, so people lean toward spending now. Economists call that a higher time preference.See the glossary. Leaky money nudges everyone toward “now.” That habit doesn’t stay inside our wallets. It shapes how we eat, work, and plan.
Food
When prices climb, families stretch their budgets. The cheapest calories are often the most processed ones: easy to store, quick to make, and filling for the money.
30%
rise in U.S. grocery prices from 2019 to 2025.
Source: BLS, CPI-U food at home (via FRED), as of 2025 (annual average).
The shift toward processed food was already under way. One large study of U.S. adults found that ultra-processed foods grew from 53.5% to 57.0% of the calories people ate between 2001 and 2018.
Source: Juul F, et al. “Ultra-processed food consumption among US adults from 2001 to 2018.” American Journal of Clinical Nutrition 115(1):211–221, as of January 2022 (survey data 2001–2018).
Money isn’t the only reason diets change. Busy schedules, marketing, and habit matter too. But when money is tight, cheap and fast usually wins.
Health
The same pull toward “now” shows up in health care. A system built around quick results tends to treat symptoms rather than build health over years. Prevention pays off slowly, and leaky money rewards whatever pays off fast.
This is an argument about incentives, not about any treatment or medicine. Talk to your doctor about your own health.
Banks
When savings melt, people lean on credit: cards, car loans, and mortgages. Banks earn money on that debt.
It also helps to know what a bank balance is. When you deposit money, the bank doesn’t keep it in a box with your name on it. Your balance is an IOU, a promise the bank owes you. The bank can use the money as it sees fit, and you are trusting it to pay you back.
Source: McLeay, Radia and Thomas, “Money creation in the modern economy,” Bank of England Quarterly Bulletin, as of 2014 Q1.
Running just to stay in place
Saving used to be simple. You put money in the bank, and it grew. Today, just keeping up takes work. The costs stack on top of each other, and each one takes a slice of what the last one left.
Prices take the first slice
Over the twelve months to September 2026, prices rose 3.7%. Your savings have to grow at least that much just to stay even. Most savings accounts don’t come close.
Source: BLS, CPI-U monthly (via FRED), as of September 2026.
Taxes take a slice of what’s left
The interest your savings earn is taxed as income. That’s true even when the interest doesn’t keep up with prices.
Say you find a high-yield account paying 4%. If you’re in the 22% tax bracket, you keep about 3.1%. Prices rose 3.7%. You still fell behind, and you paid tax on the way down.
Prices rose3.7%
What you keep after tax3.1%
0.6 points behind
Sources: BLS, CPI-U monthly (via FRED), as of September 2026; IRS, Topic no. 403, Interest received, as of current rules; IRS, Federal income tax rates and brackets, as of current rules.
Investing has the same problem. When you sell stocks, you owe tax on the gain in dollars, even the part that only reflects higher prices. Buy shares for $100,000. Ten years later, prices in general are up 30%, and you sell the shares for $130,000. That money buys no more than your $100,000 did. But the tax code sees a $30,000 gain.
Source: IRS, Topic no. 409, Capital gains and losses, as of current rules.
Property taxes rise with prices
If you own a home, you pay property tax every year, based on what your home is judged to be worth. When rising prices push that value up, your bill can go up too. Your house hasn’t changed, and you haven’t sold anything, but you owe more in cash.
+35%
more property tax collected by state and local governments in 2025 than in 2019. Prices rose 26% over the same years.
Sources: Census Bureau, state and local property tax revenue (via FRED), as of 2025 (calendar year); BLS, CPI-U annual averages (via FRED), as of 2025 (annual average).
Part of that comes from new homes being built. Part is the same homes taxed at higher values. Either way, it’s a bill that arrives every year, whether or not your paycheck kept up. And if you rent, your landlord pays it and passes it on in your rent.
Some take a second job
9.0 million
Americans worked more than one job in September 2026. That’s about 1 in 18 people with a job.
Source: BLS, multiple jobholders (via FRED), as of September 2026.
People work extra jobs for many reasons. But when savings shrink and bills grow, more hours is the most direct way to keep up. That time comes out of rest, family, and everything else.
Others pay someone to help
Keeping up also means choosing investments, watching taxes, and moving money around. Many people hire a financial adviser to do it. Advisers often charge a yearly fee based on how much you have saved. That sounds small, but it adds up.
With no fee$219,000
With a 1% yearly fee$179,000
about $40,000 paid in fees and lost growth
This is simple arithmetic, not a forecast. Real returns go up and down.
Add it all up
Prices, taxes, rising bills, and fees all pull in the same direction. Keeping your savings even turns into a part-time job, sometimes a real one. For a lot of families, it’s simply out of reach.
That isn’t a personal failure. The Federal Reserve aims for prices to rise every year, so the money itself is designed to lose value. Everything else piles on top.
Source: Federal Reserve, “Why does the Federal Reserve aim for inflation of 2 percent over the longer run?”, as of current policy.
Where Bitcoin fits, and where it doesn’t
Bitcoin deals with the first slice: no one can create more of it, so its supply can’t be watered down. It doesn’t make the other slices disappear. In the U.S., bitcoin is treated as property for taxes. Selling it or spending it can mean owing tax, just like stocks.
Source: IRS, Digital assets, as of current rules.
What it offers is a way to save that isn’t shrinking underneath you before anything else even starts.
Family and work
Homes used to be places to live. More and more, they’re treated as investments, because a house is one of the few things that holds its value against a leaking dollar. That pushes prices up faster than paychecks.
4.7×
the typical home price compared with the typical household’s yearly income in 2025. In 1984 it was 3.6×.
Sources: Census/HUD median sales price of houses sold (via FRED), as of 2025 (annual average); Census median household income (via FRED), as of 2025.
When the basics cost more than one paycheck can cover, many families feel they need two incomes just to keep up. Time with kids, rest, and long-term plans all get squeezed.
None of this is anyone’s personal failure. It’s what happens when the measuring stick itself keeps shrinking.