Lifestyle Inflation: When salary increases, people’s first thought is to improve their lifestyle. For this, people buy a new phone, buy a big house, buy an expensive car, travel abroad and spend more and more. Gradually these hobbies become needs of people. This is called ‘lifestyle inflation’.

growing problem
In today’s time, this problem has increased further because luxury lifestyle is visible every day on social media. People have now started comparing themselves not with neighbours, but with influencers, celebrities and rich people. This makes spending expensively seem normal. Gradually, expensive mobiles, branded clothes, eating out, online shopping and luxury items become a part of everyday life. The problem is that once the expenditure increases, it is difficult to reduce it later. These expenses become a burden at the time of job loss or financial problems.

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Expenses may increase after 20 years
Such lifestyle can increase your expenses in the future. For example, suppose today your family’s expenses are Rs 50,000 per month. If inflation remains at an average of 6% per year, then after 20 years the same expenditure can be around Rs 1.6 lakh per month. This means that even if your lifestyle does not change, inflation still increases your expenses manifold. If lifestyle also becomes expensive every few years, then future financial needs will increase further.

For this reason, many people are not able to save money despite earning well. Their income increases, but their expenses increase even faster.

Avoid making these mistakes
If you also want to avoid the trap of lifestyle inflation, then you should avoid making some mistakes. As:

• Increase in expenses every time salary increases
• Buying a big house or expensive car just for show
• Taking everything on EMI
• not creating an emergency fund
• keep postponing investment

SIP is necessary
The best way to fight inflation and lifestyle inflation is SIP (Systematic Investment Plan). With this, a bigger fund can be created gradually. If someone starts a SIP of Rs 10,000 per month at the age of 25 and increases it by 10% every year, then in 30 years a fund of up to Rs 8 crore can be created.

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the most important thing
It is not possible to stop inflation, but lifestyle inflation can be controlled. Earning more money should not be the real goal. The real goal is to secure the future, financial independence and a stress-free life. Good income improves your lifestyle, but disciplined investment makes your future secure.