There was a man named Mr. Rahul Shaw. He had a good job and was making a decent salary. However, as he started making more money, he also started spending more. He bought a bigger house, a nicer car, and started going on more expensive vacations. This was what is known as lifestyle inflation.

As Rahul's expenses continued to grow, he found himself living paycheck to paycheck. He was constantly stressed about money and couldn't save enough for his future. He realized that his constant spending had gotten out of control and he needed to make a change.

With the help of a financial advisor, Rahul made a budget and started cutting back on his expenses. He also started saving more money each month.

It wasn't easy, but Rahul was determined to get his finances back on track. Over time, he was able to pay off his debt and start building his savings. He learned that living within his means was the key to financial stability and peace of mind.

Lifestyle inflation is a common phenomenon among working-class people, particularly those working in multinational corporations (MNCs). As people move up the career ladder and earn higher salaries, they often find themselves spending more money on things they want, rather than things they need. This can lead to financial stress and make it difficult to save for the future.

One of the key reasons for lifestyle inflation is the perception that people need to keep up with their peers and colleagues. When everyone around you is buying new cars, taking exotic vacations, and dining out at fancy restaurants, it can be hard to resist the urge to do the same.

A few examples of lifestyle inflation in the last 5 years can be seen in this chart below:

Another reason for lifestyle inflation is the increased access to credit. With credit cards and personal loans widely available, it's easy to buy things that you can't afford today, but promise to pay for later. However, the problem with this approach is that it can quickly lead to a cycle of debt and high-interest payments.

So, how can working-class people work in MNCs avoid lifestyle inflation? One strategy is to set clear financial goals. For example, if you want to buy a house, start a family, or retire early, then it's important to have a plan in place for how to save for those goals. This can help you stay focused on what's truly important and resist the urge to spend money on things that don't align with your long-term plans.

Another strategy is to create a budget and stick to it. This can help you keep track of your income and expenses and make sure you're living within your means. It's also important to be mindful of your spending habits and to look for ways to cut costs, such as by cooking at home more often or by taking public transportation instead of driving.

In addition to that, It's important to educate yourself about personal finance and invest in long-term saving plans like mutual funds, SIP, and other investment options. This will help you have a clear picture of your financial status and plan for your future in a much more structured way.

In conclusion, lifestyle inflation can be a significant problem for working-class people, particularly those working in MNCs. However, by setting clear financial goals, creating a budget, and investing in long-term savings plans, it is possible to avoid lifestyle inflation and build a more secure financial future.

Also, It's important to remember that living a frugal life doesn't mean sacrificing your happiness but having a balance between your present and future.