Consumption smoothing is the practice of optimizing our standard of living by ensuring a proper balance between spending and saving during the different phases of our lives. Those who overspend and put off saving for retirement to enjoy a higher standard of living often have to work longer or reduce their standard of living in retirement. Those who over-save will live a more frugal lifestyle while working to enjoy a better lifestyle while retired.

In each case, the overall standard of living is less than optimal.

Now, how helpful could this be during times of inflation?