◈ GLOSSARY · PERSONAL FINANCE
Lifestyle Inflation.
A definition, in plain English — with the books that teach it.
Reviewed by ClearValue Editorial Team · Jun 27, 2026
◈ DEFINITION
What it means
Definition
The pattern of spending more as you earn more — bigger house, nicer car, pricier restaurants — so your savings rate never actually rises. It's why a $250k household can feel just as broke as a $90k one. The fix isn't austerity; it's deciding in advance what share of each raise goes to savings before it hits the checking account.
◈ IN PRACTICE
Example
A $15,000 raise that gets fully absorbed by a $400/month car upgrade and a $200/month bigger apartment leaves the household with zero new savings — versus directing $1,000/month of that raise to a brokerage account.
◈ RECOMMENDED READING
