There's a theory that as humans get nicer things, acquiring luxuries, we then view those luxuries as necessities. The happiness bump we got from acquiring a luxury wears off, and we return to the same set point of happiness as we were before.
I've never lusted after something just because it is a luxury. I like nice things and appreciate quality, and take my time before inviting more stuff into my life.
I used to be wary of lifestyle inflation creeping into my life. I thought about it a lot as I was considering which car to buy. For some time I'd had my eye on a Tesla. It's a nice car, but there were other nice cars that could be more practical and could generate the same net happiness.
I realised that selecting a Tesla over other models would be a luxury for me. I had the means to buy it, but there were arguably better quality cars available. If I bought it, it would be because I specifically desired a Tesla.
This made me think about lifestyle inflation. For a depreciating asset, that I'd likely keep for several years, how would I feel about the car months and years after purchase? Would I get a happiness bump for the first few months and then return to the same set point as if I'd selected a different model? If that were true, I might as well have selected a more rational choice, and spent the money on a life experience instead.
We're now three years into this experiment. I haven't observed that lifestyle inflation affects me. I have no desire to acquire a car more luxurious than mine. I still enjoy what I loved about the car when I got it. And, if I had to choose what some might say is a less luxurious car in future, I'd be fine with it.
Perhaps it is because I grew up in a releatively poor family. We were on benefits. The closest thing we had to a luxury were our trips to the Econolodge in Orlando where my parents sat through a 3 hour timeshare presentation to get free Disney tickets.
I treasured what we had. Some of my friends were slightly better off. I can't remember being envious of them. My parents worked hard, and were not focussed on the lack of money, at least in front of my sister and I.
I'm very thankful for this as it has inoculated me against lifestyle inflation, which by the way I can see is a very real thing for others, and given me a deep appreciation for what I have.