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Inflation is running rampant but I’m not talking about money. I’m not talking about price inflation. I’m talking about an expectation inflation. What’s that? I’ll explain.
When I was growing up poor I never expected certain things. We didn’t have cable television and I didn’t have the latest video games of the time such as Atari. These common items for people with a bit more means were luxuries we just couldn’t afford. When times turned better, my experiences of the past didn’t set me up for high expectations. I wasn’t spoiled.
Today however people, regardless of their means, want, almost expect, to live like the people we see on TV from Lifestyles of the Rich and Famous, when I was a kid, to MTV Cribs today. I remember seeing a story on 20/20 years ago where John Stossel asked someone in line for a soup kitchen, a poor person to be sure, if they had a place to live – of course they did. Did they have cable? Again the answer was yes. How about a VCR? Yup. How many TVs? Three.
From kids living in poverty buying 100 dollar plus sneakers to the absolute “need” for an Ipod, our expectations of what is necessary has increased dramatically. That’s expectation inflation. We expect more, more, more.
The whole concept of living below your means, or being frugal rejects expectation inflation. Normal price inflation is beyond our control and so if we want a gallon of milk we pay whatever the cost. But when something is a want rather than a need we have total control over the decision to buy it. Expectation inflation is within our control.