Knocking Out Lifestyle Inflation

Over spending have long-drawn consequences, consuming an individual’s life savings.

- Himali Patel

The annual average inflation in India has been following a downward trajectory over the past few years. From a double digit growth of 10.1 per cent witnessed in FY2013 it has come down to 3.4 per cent in FY2019, a sharp seven-yearlow. While this might seem like a silver lining in a dark cloud, inflation continues to remain an immutable part of every Indian.

Inflation is a hard-hitting reality and prices of products and services are always on the rise ranging from food, housing, education, medical expenses – almost every sector. Needless to say, such acts of distension have long-drawn consequences and most importantly, with time, eats up an individual’s life savings. In order to beat it, people are always on the lookout for investment tools that can assure better returns.

Among the various kinds of inflation explained above, there exists another variety—lifestyle inflation. Lifestyle inflation refers to increasing one’s spending when income goes up. It tends to continue each time someone gets a raise, making it perpetually difficult to get out of debt, save for retirement or meet other financial goals.