What is Lifestyle Inflation & How to Stop It (Before You Pop)

If I handed you an extra $500 every month for the next year, what would you do with the money? Taking the extra $500 each month and paying off some debt, says a lot about your financial mindset.

On the other hand, if the first thought that popped into your head was something you could buy – like a new car or granite counters – chances are you might be teetering on the tight rope called lifestyle inflation!

The all too common phenomenon where as you earn more money, you increase your lifestyle! However, today we are going to talk about how to avoid lifestyle inflation!

What exactly is lifestyle inflation?

By exact definition, lifestyle inflation is increasing one's spending due to the increase in their income.

Real Life, Lifestyle Inflation

Most are not able to retire comfortably & suffer from multitude of financial issues such as financial stress & hardships. Here are ways to help curb lifestyle inflation.

1. Save your money first

Call it reverse budgeting, pay yourself first, or just saving money – at the end of the day if you want to stop lifestyle inflation, save at least 15% of your income. 

2. Stop comparing yourself

It is a natural human tendency to compare ourselves to others. We find ourselves saying things like, “I wish I was as,” and insert whatever comes next.

3. Stop valuing stuff and money, value memories

In order to help you avoid lifestyle inflation, recognizing that stuff won't really do much in the happiness area will help you!

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