What is lifestyle inflation and how it affects finance?

[Good-Person]

Lifestyle inflation is one of the most common kinds of scenarios when we discuss finance. Whenever inflation increases, the chances are that the expenses of people also increase as well by the passage of time. This is the basic meaning of lifestyle inflation. So, how does it affect financial positions of people?

 

[Kane]

Let's say you are earning $100 and you are able to pay your bills with your income. Now imagine, there is inflation. When there is inflation, the value of money goes down and your $100 income will not be enough to pay your bills. Despite earning the same amount, you will not be able to maintain your life.