When your income increases your spending increases, more like you get tempted to spend money buying things and that temptation then turns in an habit. Then what happens is law of diminishing utility kicks in. You just get used to things and it becomes a norm in your life.

After this if your income tanks, it hurts hard.

You can very well travel by bus for 20 years of your life, travel a day by car and it will make you feel awesome. Then travel 10 years by car, it just feels normal. Then when you go through a difficult financial, which forces you to take a bus again- This time you will feel like crap.

People whom you are talking about are addicted to changing phones/tablets twice an year. Buying developer toys because they like it, drink latte every 45 mins just because they can. I can go on and on, but if you sit down and jolt down list of things that we do and spend money on, you will realize We are basically addicted to spending money

We just keep buying things. We are told to not do so means not doing better compared to your peers. We are told living frugal means living like a loser and spending money on fun/experiences/<whatever you call it> is what makes you successful.

Net-Net you end spending a lot more on things you don't at all. And expenses go up real high.

I've seen this among my rich friends as a kid, mysteriously they couldn't even live without things which I didn't even know about.