Thoughts on lifestyle inflation:

  1. It is real. There is no shame in acknowledging it. At one point in my life I thought 1CR was enough. At 6% FD rate I would get 50K per month. My rent was 12/13K at that time. I thought: How can I spend more than 50,000 a month? It was impossible to do. I had one room in a 2 BHK flat. I didn’t eat out that much. I hadn’t really got into the Apple ecosystem. And yes, I did not understand the concept of inflation at all.
  2. I could have easily afforded a much better house. But I always preferred to live well below my means. And maintain a lifestyle that was recession-proof.
  3. My rent is now ~47K a month. That is 3/4 of what it was 5 years ago. Rent in Bangalore has also gone up significantly. But it is still a lot less than what most of my friends are paying as rent in Bangalore. I also live in Murugeshpalya. I do not live in the Defence Colony in Indiranagar. Can I afford to pay more? Sure. There’s no need to do that. I have always been happy to live a life of low (er) status. At least in comparison to my peers/friends.
  4. I do not own a house. I don’t have a car of my own. I can probably afford to have both of them. Don’t want to. Tech bro salaries are a good way to boost your savings. But if you inflate your lifestyle too much and increase your recurring expenses too much, you become a slave to that high-paying job.
  5. I am happy to spend more on one-off expenses: holidays, purchases of things that give me short-term pleasure, but I am also happy to downgrade if I ever have to live on a lower budget. I am happy to spend more on a hotel room from time to time, while I am perfectly happy to stay in a cheap hostel if I have to. I get the same amount of pleasure from both. And I don’t even have an Instagram account. So who knows where I’ve been on my holiday?
  6. My only worry: getting into debt, maybe finally getting sucked into buying a flat in Bengaluru, and EMI tying me to a high paying job. Recurring expenses worry me. And that I will not have the ability to get rid of them. One-off fixed expenses are fine. When it comes to reducing my cost of living, I can go back to my wired One Plus headphones and ditch my AirPods.
  7. Do experiences matter more than things? Who knows. I had a great time in Bali when I was there in February. Three years from now, I probably won’t even remember it. But it was a lot of fun while I was there. I use my PS5 weekly. And I listen to podcasts on my AirPods on a daily basis. I spent a lot on my squat rack, but also bought used weights from Kengeri. I went there by taking the metro. I picked up all the weights. Came back in the same Porter truck that I used to load my weights in. But I also gamble a lot. I was down 3.2L this year, before I recovered all of it. Now I am decently up. I’m not consistent when it comes to how I like to spend. I do what I like. So should you. You decide. Don’t change everything about the way you live your life based on what you read on Twitter. Most people there are as confused as you or I. They just have a lot of strong opinions and shout a lot. Find what makes you happy. Spend on those things. It is your money. But yes, try saving some. The markets are very unpredictable. To ride out downturns, you should have a decent nest egg.