What is Lifestyle Inflation? How to cope?

Lifestyle inflation, or "the expansion of living," means that income increases, but we also spend more as well, such as when we get more salary, move to more upscale condos, buy more expensive, eat better stores, etc., until the end has almost no money to collect, even if the income is high.

💸 An example of Lifestyle Inflation.

Revenue 25,000

Expenditure (before) eating 50 baht

Expenditure (after) eating luxury restaurant 300 baht

Revenue 40,000

The expenditure (before) is dormitory 4,000.

Expenditure (after) moved to condos of 10,000.

Revenue 60,000

Expenditure (before) boarding the bus

Expenditure (after) installment of new cars

🤔 Although it seems reasonable ("work hard, have to reward yourself"), if poorly controlled, there will be no money to save at all.

💣 The negative effects of Lifestyle Inflation.

- No savings or investments.

- Unknowingly create debts such as swiping cards, installments.

- Can't retire early or change jobs with less income because there's a lot of burden.

✅ How to deal with Lifestyle Inflation

1. Defines the proportion of the use of money clearly

Like the 50/30/20

• 50% spend required (stay, eat, travel)

• 30% use at will (entertainment, shopping)

• 20% savings / investments

📝 If income increases, the proportion should not be increased.

2. Increase income → Increase savings before using

Technique: "Save more, spend game."

Every time you get a salary, for example, $5,000.

• Save first, such as 3,000 baht

• Another 2,000 will add a little lifestyle.

3. Spend money on "value" rather than "price."

• Instead of buying expensive things, ask how much "happiness" or "benefit" we get.

• Example: Buy 30,000 brand bags and 3,000 good bags that work the same. Is it worth it?

4. Don't compare yourself to others.

"Comparison is the thief of joy."

Others may seem rich, but we don't know how much he owes.

💡 Lifestyle Inflation is not wrong, but it must be "conscious" and "well managed." If controlled, it will live better without financial breakdown.

But if you let it go, how much more salary will never be enough.

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