TAASEEN MOHAMMED ISLAM

If there was a defining keyword for the current decade aside from pandemic, it would be inflation. In simple terms, inflation is why being able to afford eggs is more of a status symbol than having a brand-new iPhone. It’s also why eating out is getting costlier, yet portion sizes are getting smaller. Ultimately, this phenomenon is a reflection of the current socio-economic and political state of the world, but that is an article for another time. Today, we’ll talk about a less common but equally dangerous form of inflation that creeps up on you out of nowhere, aptly termed “lifestyle inflation”.

When you’re in school or college, you are usually on a tight budget, usually pocket money or earnings from tutoring gigs, which isn’t much but enough to get a burger once in a while. However, from university onwards, the amount of money you earn usually increases. Be it part-time roles, internships, or eventually a full-time job, you are suddenly earning far more money than the 17-year-old version of you could even comprehend. Such an increase is an intrinsically good thing, as being in a good financial position is very important to a better quality of life, but this also slowly changes the decisions you make. You may have taken the bus to get somewhere before but decide to take an Uber now that you can afford it or buy the pricey gelato you’ve never had the courage to try before.

Generally, lifestyle inflation seems harmless; after all, don’t we all deserve to treat ourselves once in a while? Yes, but having expensive coffee daily, even as a coping mechanism for your dreadful job, can add up in the long run. At the end of the month, you’ll be surprised by the amount of money that funnels into eating out, impulsive purchases, and general unchecked spending.

While I don’t intend to shame anyone for their decisions and personally have fallen into the lifestyle inflation trap, it is an unsustainable financial situation.

Allthough unpleasant to hear, we are all one rainy day or hospitalisation away from debt. The economy hasn’t been great for quite a while, and it does not seem to be getting better anytime soon. So how can I combat lifestyle inflation? There isn’t a one-size-fits-all solution to this, but starting small, like logging down your expenses and seeing how much you are spending on non-essentials, is a start. Let’s say, seeing that a 500 taka coffee per workday leads to around BDT 10,000 a month can usually provide the jolt needed to commit to better financial decisions.

If you find yourself with some extra disposable income that you don’t want to blow on compulsively buying clothes online, it may be a good idea to actually open a savings or deposit scheme, as doing so is far more accessible now. And if it all fails, just give it to your mother to hold on to for you, but there’s a chance you’ll never see that money again.

Finances are a tricky part of growing up that no one ever prepares you for, and it’s not uncommon to want to give yourself things that you may not have otherwise had growing up. But there is a difference between buying a plushie vs putting down a 12-month instalment plan on a new phone. The cost of living is barely affordable as is, and it is important to do some planning alongside treating yourself to make sure you can survive when artificial intelligence takes away all entry-level jobs in the next five years.

Taaseen’s finances are in shambles send him financial advice at taaseen.2001@gmail.com