With all the talk about tax rates and the fiscal cliff, hardly anyone has mentioned what is probably the most effective and least understood tax in the federal arsenal: inflation.

Wait a minute. Isn’t it confusing to call inflation a tax?

It is. That confusion is exactly why inflation is the ultimate stealth tax.

One of the few deficit-reducing measures that has the support of both parties and President Obama is a change in the way the government measures inflation. Our lawmakers have agreed on another in a series of adjustments to the way they calculate the consumer price index (CPI). The proposed changes will understate the future CPI even more than the current formula already does.

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“Shop locally.” “Eat locally.” Do a quick Internet search for either of these terms and you get a host of results. Plenty of people are interested in saving energy and supporting locally-owned businesses by doing their buying close to home.

So many people are committed to eating locally grown food that there’s even a name for them: locavores. Being a locavore in South Dakota in the wintertime, by the way, can be a challenge.

If buying locally matters to you, here’s another aspect of it to think about: giving locally.

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An exciting new job opportunity in another state. Health problems that make one-level living an urgent necessity. The need to downsize quickly because of a job loss.

These are just a few of the reasons people might need to sell a home sooner rather than later. The real problem arises when the local real estate market is a challenging one. Here are a few suggestions for anyone looking to sell a house under difficult conditions.

1. Evaluate the urgency of your situation. If you can wait a few months without harming your career, your finances, or your health, that may be the wiser choice. If you can’t make payments, or you need to relocate right away and can’t buy a new house until you sell the current one, waiting to sell is usually a losing proposition.

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“Be frugal.” “Save for the future.” “Live on less than you make.”

That’s my usual financial advice, and it’s well worth repeating even though too many Americans aren’t following it. Sometimes, though, I find it necessary to work with clients to overcome a different problem—underspending.

Huh? How can underspending possibly be a problem? Isn’t it a virtue to save and accumulate?

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Be frugal. Live on less than you make. Save for the future. It’s my message, and I’m sticking to it.

Just in case you’re getting tired of that message, though, let’s take a look at thrift from a slightly different perspective. For anyone who wants to throw cash around, here are some effective ways to waste your money:

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One of the biggest adjustments for many people when they retire is making the switch from saving to spending. For years and years, they’ve been putting money away for the future. It’s hard to accept that it’s time to start taking that money out because “the future” has arrived.

Financial planners can help retired clients make this transition more comfortably by helping them decide on a reasonable withdrawal rate to answer the crucial question, “How much can I take out of my portfolio every year?” That rate needs to balance the need to have enough money to live comfortably and the need to make sure there is enough money for the rest of the clients’ lives.

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Have you ever seen a Super Bowl ad touting how much money you could save if you bought something second-hand? Of course not. There’s not a lot of encouragement in our culture to buy used stuff. Even the one exception, a used home, is described as “existing.”

Buying used just isn’t cool—that is, unless you’re a wealth builder. Many of them look upon buying used as more of a badge of honor than an embarrassment.

Certainly, there are many items that are best purchased new. Toothbrushes, toilet paper, and underwear come to mind. Yet there’s one thing that’s almost always better to buy used—a vehicle.

Let’s look at a few common myths around buying a new car.

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Last week we explored how you could use a reverse mortgage to produce an income for life while allowing you to live in your home until your death or you move out. We also considered the possibility of using a reverse mortgage to refinance an existing mortgage, thus eliminating a house payment and possibly creating additional monthly income.

This week we will look at a few more creative ways to use reverse mortgages, as suggested by financial planner Michael Kitces.

While most of us think of a reverse mortgage as a way to unlock equity in a current home without having to sell it, Kitces points out that another use for a reverse mortgage is buying a new home. While the buyer will need a larger than normal down payment due to the lower lump sum limits of a reverse mortgage, this technique can be used to increase cash flow while downsizing a home.

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Like most financial planners, I recommend not thinking of your home as a part of your investment portfolio or a source of retirement income. One possible exception to this rule is a reverse mortgage.

Lenders which are FHA-approved can offer Home Equity Conversion Mortgages, or HECM‘s. These are insured by the U.S. government and allow homeowners age 62 and older to borrow against the equity in their homes. When the homeowner dies or moves out, the property is sold to repay the loan. Any equity left over belongs to the owners or their heirs. Any outstanding loan balance must be forgiven by the lender.

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After a short period of saving more of their disposable income at the depths of the recent recession, Americans are returning to recent historical patterns of spending more and saving less.

Usually this trend indicates “happy days are here again” as the decline in savings means consumers’ confidence is rising. That is not the case today. Consumer confidence is just half of what it was at the peak of the “good old days” of 2007. That year our national savings rate was 2.1%, just above its post-WWII low in 2005 of 1.5%.

As millions of jobs disappeared and consumers hunkered down during the 2008-2009 recession, our savings rate almost tripled. In 2008 it was 6.2%. This thriftiness didn’t last long; by the fall of 2011 our savings rate was back to a paltry 3.6%.

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