Hard to Fire
Hard to Fire · Chapter 10 · Calculator

Lifestyle Inflation Detector

Compare monthly expense growth with monthly after-tax income growth before a raise quietly becomes permanent burn.

The quiet problem isn't one dramatic purchase. It is the permanent monthly cost that follows each raise home.

Monthly income growthNot calculated
Monthly expense growthNot calculated
Lifestyle inflation ratioNot calculated
Add all four monthly numbersUse the same definitions in both periods. Otherwise the comparison is decorative math.
Complete the four inputs to produce the detector line.

Read the ratio

Lifestyle inflation ratio = monthly expense growth ÷ monthly after-tax income growth

Below 0.50Less than half became spending
Less than half of the additional income became monthly spending.
0.50 through 0.75Lifestyle absorbed a substantial share
A substantial share of the additional income became monthly spending.
Above 0.75Most of the added income became burn
Most of the additional income became monthly spending.

If monthly after-tax income did not increase, don't calculate the ratio. Compare the change in burn directly. Any increase in spending without an increase in income reduces household margin.

These are planning bands, not external benchmarks or a moral grade.

Sarah and James

Five years earlier, their monthly after-tax income was $10,400 and burn was $6,200. Today income is $13,300 and burn is $8,450. Income grew $2,900. Burn grew $2,250. The ratio is 0.78.

Dollar margin improved, but the percentage margin narrowed. Two facts can sit at the same kitchen table.

Don't congratulate the raise too early

A raise that becomes a car payment, tuition increase, subscription stack, and larger fixed-cost base has not disappeared. It has changed sides of the ledger.

Whitman Rule: when after-tax income rises, send at least half of the increase to savings before expanding fixed costs. The percentage can change. The order should not.