Lifestyle inflation rate
70.0%
Share of income increase matched by higher spending.
Lifestyle Inflation Detector & Simulator
Explore how lifestyle shifts interact with income growth over time.
Compare income and expenses, estimate how much of each raise is being absorbed by higher spending, and view illustrative net worth paths under different lifestyle inflation scenarios.
Income and spending snapshot
Projection assumptions
Scenario focus
Lifestyle inflation snapshot
Wealth capture rate
30.0%
Portion of your income growth not used for expenses.
Lifestyle inflation score
51 / 100
Simple 0–100 index based on how much of a raise is spent.
Raise allocation
The latest raise is estimated at US$6,000 per year, with 70.0% flowing into higher expenses.
- Annual income increase: US$6,000
- Annual expense increase: US$4,200
- Share of raise spent: 70.0%
Expense-to-income ratio
These ratios compare expenses to income before and after the most recent change.
| Snapshot | Expenses / income |
|---|---|
| Previous | 70.0% |
| Current | 70.0% |
Estimates are illustrative and for educational purposes only. This tool does not provide financial or investment advice.
Visual overview
Lifestyle metrics and scenario snapshot
Bars summarise detection metrics and end-of-horizon net worth across the three illustrative scenarios.
Lifestyle inflation signals
Lifestyle inflation rate70.0%
Share of raise spent70.0%
Wealth capture rate30.0%
Lifestyle inflation score51 / 100
Previous expense-to-income ratio70.0%
Current expense-to-income ratio70.0%
Scenario end net worth
Continue lifestyle inflationUS$81,251
Freeze lifestyle (inflation-only)US$102,500
Split future raisesUS$87,322
AI insight
Lifestyle inflation interpretation
Press the button to generate an AI summary of the current lifestyle inflation scenarios. Nothing is saved or sent anywhere.
AI-generated insight for explanatory purposes only. Estimates are illustrative and this does not constitute financial or investment advice.
Scenario projections
Each scenario uses the same starting point and growth assumptions, but varies how much of future income growth flows into spending versus savings.
Continue lifestyle inflation
Expenses continue to move with income in line with the detected lifestyle inflation pattern.
End net worth (nominal):
US$81,251
End net worth (inflation-adjusted):
US$70,088
Opportunity cost vs best scenario: US$21,249
Freeze lifestyle (inflation-only)
Expenses rise only with inflation while income grows at the rate you entered.
End net worth (nominal):
US$102,500
End net worth (inflation-adjusted):
US$88,418
Opportunity cost vs best scenario: US$0
Split future raises
A portion of each raise flows into expenses and the rest into savings, using the split percentage you entered.
End net worth (nominal):
US$87,322
End net worth (inflation-adjusted):
US$75,325
Opportunity cost vs best scenario: US$15,178
Year-by-year breakdown
This table follows the selected scenario and shows how income, expenses, savings, and invested balance evolve over time.
| Year | Income (annual) | Expenses (annual) | Savings (annual) | Net worth (end of year) | Real balance (optional) |
|---|---|---|---|---|---|
| 1 | US$55,620 | US$40,102 | US$15,518 | US$16,294 | US$15,819 |
| 2 | US$57,289 | US$42,508 | US$14,780 | US$32,628 | US$30,755 |
| 3 | US$59,007 | US$45,023 | US$13,985 | US$48,943 | US$44,790 |
| 4 | US$60,777 | US$47,650 | US$13,128 | US$65,175 | US$57,907 |
| 5 | US$62,601 | US$50,394 | US$12,207 | US$81,251 | US$70,088 |
Scenarios
Scenario comparison
Save different income, expense, and growth setups to compare how lifestyle inflation changes long-term projections.
Save at least one scenario to build a comparison set.
Results explainer
See, at a glance, how your income and expenses moved, how much of each raise turned into spending (lifestyle inflation), and what that did to your savings rate. The chart and table make it obvious when costs started eating your raises, and exports carry the same numbers so you can play with them elsewhere.
How it works
The tool lines up your income and expense paths, checks how much of every raise flowed into spending, and shows what’s left for saving and simple growth. Add inflation and an expected return to see both a headline (nominal) view and a “today’s dollars” view side by side.
Inputs used
- Starting income, expected income change, and timeline
- Starting expenses and expected expense change
- Optional investment return and inflation rate
- Target savings rate and any scenario labels
- Your chosen currency for all outputs
Core formulas
- Lifestyle inflation % = expense change ÷ income change
- Savings rate = (income − expenses) ÷ income
- Projected savings = savings added over time × (1 + return)^years (if set)
- Real view (optional) = nominal projections ÷ (1 + inflation)^years
Calculation steps
- Apply your income and expense growth across the years you set.
- Compare expense gains to income gains to spot lifestyle inflation.
- Show savings and savings rate for each year.
- Grow savings using your optional expected return.
- Optionally deflate everything by your inflation rate for a “today’s dollars” view.
- Build the chart, table, and exports from those figures.
Example scenario
Start with $80,000 income and $50,000 expenses. Let income rise 4% a year and expenses 2% a year, with a 6% investment return and 2% inflation. After a decade, roughly half of each raise went to spending, keeping lifestyle inflation near 50% and the savings rate in the mid-30s. Savings stack up and compound; the inflation toggle shows what that looks like in today’s dollars. Copy the scenario, bump expenses to 4%, and watch how fast the savings rate thins out when lifestyle inflation matches your raises.
Interpretation notes
- If lifestyle inflation is high, your raises are mostly fueling spending instead of savings.
- Savings rate usually matters more than tiny tweaks to return assumptions in the near term.
- Inflation squeezes the “real” view—compare nominal vs real to see how it bites.
- When expenses grow as fast as income, savings can flatten in a hurry.
- Side-by-side scenarios reveal whether income, expenses, or assumptions are driving the swing.
Limitations & assumptions
The model assumes steady income and expense changes, one return rate, and one inflation rate. It does not handle taxes, debt rules, category budgets, fees, lumpy bonuses, job changes, or spending shocks. Returns are smoothed, not market paths. Currency is whatever you pick—there’s no conversion. Treat it as a directional view, not a promise.
Disclaimer
Estimates are illustrative and for educational purposes only. This lifestyle inflation detector does not provide financial, investment, tax, or legal advice. Results depend on your inputs and assumptions and may not reflect real-world outcomes. Market returns are uncertain and may be negative, and fees, taxes, and inflation are not included unless explicitly stated. Past performance is not a reliable indicator of future results.
FAQs
What does this tool estimate?
It tracks how much of your income growth is turning into higher spending versus higher savings, and shows where your savings rate and simple growth could land under different lifestyle choices.
What’s included or excluded?
Included: income changes, expense changes, lifestyle inflation %, savings rate, and simple growth projections with optional inflation and investment returns. Excluded: taxes, debt paydown rules, fees, and detailed category-level budgets.
What assumptions are baked in?
It treats income and expense changes as steady over your timeline, applies one inflation rate and one investment return if you choose, and doesn’t simulate month-by-month swings.
Can I run scenarios or export results?
Yes. Create multiple scenarios with different income/expense paths or assumptions, then export the projections for your notes.
Is my data private?
Inputs stay in your browser for calculations. Downloads save locally. Clear the form or refresh to remove your entries.
Is this financial advice?
No. It’s an educational illustration to help you see patterns. Talk to a qualified professional for personal advice.
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