The relationship between the standard of living and the cost of living is that the higher the standard of living, the more expensive it will be for people to maintain it, or even live up to the standard. The standard of living is artificial and is predetermined or established by the authorities or the government as a measure of good living. Setting a standard of living allows the government to assess its development goals and periodically assess the percentage of the population that achieves the goal. Society also contributes to the establishment of a standard of living through its lifestyle choices and its unquestioning acceptance of the artificial standards to which it adheres.
In this sense, the more amenities, services, goods and other types of goods people have, the more they will strive to reach these objects, even when they do not have the income to finance them. This kind of mindset is intensified in part by the availability of credit in various forms to facilitate the achievement of such a lifestyle. The relationship between standard of living and cost of living can be observed when people choose to spend money they do not have to achieve or maintain a standard of living to which they believe they are entitled.
As the standard of living increases, the cost associated with its maintenance also increases, even if the income to maintain the increased expectations does not increase adequately. Sometimes expectations of a required standard of living trap people in a vicious cycle from which they may feel powerless to break free. For example, the more money an individual earns, the higher the expected standard of living in relation to their financial situation. This makes the cost of living for these people go up even more, which means they have to earn more money to keep to the standard.
The comparison between the cost and the standard of living of the past further illustrates the relationship between the standard of living and the cost of living. In the past, before the advent of many technological devices and labor-saving devices, the standard of living was quite simple and the cost of living was also really affordable. At that time, the main desires were good housing, food, clothing and medical care. With the advent of technology, people must consider additions to the accepted standard of living, which often includes telephones, the Internet, heating and cooling, vehicles and cooking, education, entertainment, and vacations. All these requirements add up and contribute to the rising cost of living.