Lifestyle Inflation
Lifestyle Inflation refers to increase in spending when one’s income goes up.
It tends to continue each time one gets a raise; making it perpetually difficult to get out of debt, save for retirement or save for any other financial goals.
Lifestyle Inflation is termed as wealth killer as even before the person realizes he ends up spending substantial amount of money on things which he does not require.
Ways to reduce lifestyle inflation
- Define clear financial goals – this will ensure that your spending habits fall in place.
- Be Conscious of your spending
- Avoid debts – make a list of needs and priorities
- Make a budget
- Invest excess money
- Do not be influenced by spending habits of other
