We are witnessing inflation through our eyes and that is also at an exorbitant rate. If I compare the prices of each and every basic utility the prices have increased more than 20% in the last 3 years, along with that the medical, as well as school tuition fees, have increased drastically. The wholesale price index is at the highest point and thus the sufferer is the common man.

![image.png](https://i.imgur.com/SVehy95.jpg)
PC: Pixabay.com

The salary does not rise in these 3 years in which the prices of the basic necessities like food, petrol have risen. This is the 10-year chart, and as you can see the inflation was under control from 2014 but in the last 3 years mainly because of the Covid the inflation is rising again and it is affecting the common man big time.

![image.png](https://i.imgur.com/Rv2RyCS.png)
PC: https://tradingeconomics.com/

Now, this shows the inflation in numbers but when we see on the ground, each and every product has risen their price by 20-30% mainly because of the cost of production but the problem is getting faced by the consumers like us. The school tuition fee is rising at the rate of 10% which means the inflation on the medical and education front is more than 10%. So that means if your salary is not growing by 10% every year then you cannot cope with the price or if your investment does not grow by a minimum of 10% then you are seeing a loss.

Now if we look at the HBD getting 20% APR in the whole year is actually the best bet for beating the inflation but again as an Indian, we also have to give 30% tax on our income which means the effective interest would be around 14% which is again good because we can beat the inflation by 4%. Now this 4% will not help us to attain that financial freedom so that means either we have to increase our income and save more or we should try to get that more interest.

And then there is lifestyle inflation because of so many advancements in technology there are so many things to buy today. And thus even if it is not a basic necessity people do buy it to make their life easier or to have some entertainment (like a subscription to all OTT platforms). So only considering the nominal inflation rate is the biggest myth, because the inflation can rise because of the lifestyle changes as well.

For example, someone could buy a normal 100-125cc bike for Rs 60K but he opts for a better bike which is 150cc or more, which will cost him more than 100K INR. Now tomorrow he might buy a bike which is 200cc or more or might buy a car which will cost way too much and thus this is all about Lifestyle expenses which can shoot if you don't keep a tab on it. Changing your lifestyle is not bad and it's actually better to improve your lifestyle when you want. But we need to take the lifestyle inflation into account as well as the goal we have set for ourselves in the future.


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