Thursday, October 21, 2021

What is lifestyle inflation? Lifestyle inflation refers to an increase in spending when an individual's income increases.


When a person gets a raise, they tend to spend more money to buy extra goods and services and live a more luxurious lifestyle. This in turn causes them to be trapped in the paycheck-to-paycheck cycle.


So no matter how much income they bring in, they can't move forward. Lifestyle inflation can make it difficult to reach financial goals such as becoming debt-free or saving for retirement.


To avoid lifestyle inflation, increase the amount you're saving. Pay attention to your spending choices. Don’t go overboard when you do decide to treat yourself.