Today is Blog Action day, an annual nonprofit event that aims to unite the world’s bloggers together to post about the same issue on the same day, with the aim of raising awareness and promoting discussion. Last year it was all about the environment, this year the topic is poverty. Thousands of sites are likely to get involved so be sure to keep an eye out. If last year i anything to go by, there will be plenty of original and insightful ideas. For my contribution I want to take an introductory look at lifestyle inflation.
With money we tend to spend proportionally as much as we make. This means our lifestyle matches our income. If you are on minimum wage you won’t be looking to buy a big mansion, have a massive TV or eat out every night. However, as anybody who has ever gone through a promotion or wage increase will know, your expenses usually increase in response. There is no point looking at small televisions in the shop anymore when you are suddenly making several thousand dollars extra ever year. If you were to lose that job or your earnings shrank though, you would struggle to adjust your lifestyle. It’s easy to adopt to a more expensive lifestyle, but it’s not so easy to take a step down. And with the economy the way it is right now, you can probably see how this is a big problem.
Why do so many people succumb to lifestyle inflation? Is it companies ramming their latest fancy gadgets into your face every advert break? Is it peer pressure and the desire not to be left behind by our wealthier neighbors? Is it banks rashly offering ridiculous loans which are equally rashly taken up by eager consumers? It’s perhaps all that and many other reasons. Over the last decade it’s really got out of hand for many people but the sad fact is our standard of living is infinately better than (probably) 99% of the world before lifestyle inflation even takes effect. After a certain level of income (basically when you can comfortably afford the basics and can pay your bills every month) the happiness increases are less so why are we so self-indulgent? The right approach is (and always has been) of course to live well within our means. Rather than buying stuff because you can, ask yourself whether you really need it? Will it bring real value to your life? I think under the current circumstances it’s necessary to remember that.
October 17, 2008 at 04:51AM
Good post. I’ve been trying to adopt the “Do I really need it?” approach for a few months. I find it hard because I love my gadgets and my books… It just needs a little bit of self-discipline and the repetition of my favorite mantra, “Things are the thieves of time”.
October 17, 2008 at 04:39PM
Good point John, I like my games, books and gadgets but if I indulge in them too much I become apathetic to it all. Buying the odd game that I really want and will really enjoy means so much more, so it’s worth it at the end of the day.
September 18, 2009 at 06:10PM
That was a very nice read. I agree with having a proportional lifestyle aligned with your income. With that, you will have a comfortable kind of life without thinking of financial concerns.