What is 'lifestyle inflation' and how does it limit wealth?

More money, more problems? Not necessarily.

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(Image credit: Malte Mueller/Getty Images)

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As your income grows, it's easy to let your spending grow with it. You dish out a little more here and a little more there — a bigger apartment, more meals out, an additional vacation or two. This is known as "lifestyle inflation," and while it may seem innocuous, it can have major financial implications. It is a major roadblock to building wealth and can keep you living paycheck to paycheck — even when those paychecks are much larger than they used to be.

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