We tend to live in a world of instant gratification. People want everything now or results immediately.
No one wants to delay gratification. This gets reflected in the inability to control spending. As a result, income that comes in quickly gets spent. This is the root cause of most personal finance disasters.
Expectations have gone up. A few years ago, if one was paying an equated monthly instalment (EMI) on a Honda, today they will want a BMW. If you had a two-bedroom apartment earlier, now you will want three bedrooms.
Just take a look at lifestyle inflation which is much higher than the current 12 per cent. Everyone is concerned about the inflation which is monitored by the wholesale price index (WPI). But lifestyle inflation was always much more. Look at a simple thing like the ticket cost to attend a movie over the weekend. It can set you back by Rs 400. High lifestyle inflation is what eats into the income.
Courtesy: 
Text: Amar Pandit, CEO, My Financial Advisor. He can be reached at amar.pandit@gmail.com
Illustrations: Dominic Xavier
Also read: What you should do in today's market
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